What Qualifies for Section 179?
Qualifying assets include tangible personal property used in business: machinery, computers, office furniture, vehicles (with limitations), off-the-shelf software, and certain building improvements (HVAC, roofing, security systems). The asset must be used more than 50% for business and placed in service during the tax year. Real property generally does not qualify.
What Are the Section 179 Limits?
For 2026, businesses can expense up to approximately $1.25 million in qualifying assets. The deduction begins to phase out when total equipment purchases exceed approximately $3.13 million. The deduction cannot exceed your business's taxable income — you cannot create a loss with Section 179 alone.
How Does Section 179 Compare to Bonus Depreciation?
Both allow immediate expensing, but they differ: Section 179 has a spending cap and cannot create a loss. Bonus depreciation has no cap and can create a loss. Section 179 applies only to new and used property; bonus depreciation rates are phasing down after 2022. Many businesses use both together for maximum benefit.
Frequently asked questions
Can sole proprietors use Section 179?
Yes. Section 179 is available to all business types — sole proprietorships, partnerships, S-corps, and C-corps. Sole proprietors claim it on Schedule C. The deduction is limited to net business income from all sources.
Does Section 179 apply to vehicles?
Yes, but with limits. Passenger vehicles are subject to luxury auto caps (around $20,200 for the first year). SUVs over 6,000 pounds GVWR have a higher Section 179 limit of approximately $30,500. Vehicles used less than 50% for business do not qualify.