Can I use Section 179 for a vehicle?

Yes, but with limits. Vehicles over 6,000 lbs GVWR (like many SUVs and trucks) can qualify for significant deductions. Lighter vehicles have lower caps. The vehicle must be used more than 50% for business.

What's the difference between Section 179 and bonus depreciation?

Section 179 lets you choose how much to expense (up to $2.56M) and requires taxable income. Bonus depreciation (100% under OBBBA) applies automatically to the remaining cost basis and can create a loss. You apply Section 179 first, then bonus depreciation.

Can I use Section 179 if my business has a loss?

No - Section 179 is limited to your taxable business income. You can't use it to create or increase a loss. However, any unused Section 179 carries forward to future years.

Does the equipment have to be new?

No - Section 179 applies to both new and used equipment, as long as it's new to your business. You can buy used machinery, vehicles, or computers and still deduct the full cost.

How was Section 179 changed by the OBBBA?

The OBBBA permanently increased the maximum deduction from $1 million (pre-TCJA) to a base of $2.5 million, indexed for inflation. For 2026, the limit is $2.56 million with a phase-out starting at $4.09 million in total qualifying purchases.

Business Owner

Section 179 Expense Deduction

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intermediate · $50K - $100K

Instead of depreciating business equipment over years, Section 179 lets you deduct the entire cost in year one.

Buy $50K of qualifying equipment for the business?

Deduct $50K this year. (Vehicles have separate caps, covered below.) Limit: $2.56 million (2026, increased by OBBBA).

Annual Limit

$2.56 million (phases out above $4.09M in purchases) - 2026

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Tax Benefit

Immediate deduction up to $2.56 million for business equipment

Requirements

Equipment used 50%+ for business
Purchased (not leased) and placed in service same year
Business must have taxable income

How to Implement

1Purchase qualifying equipment (computers, vehicles, machinery)
2Calculate business use percentage
3Elect Section 179 on Form 4562
4Deduct full cost in year of purchase

Frequently Asked Questions

Annual Limit

$2.56 million (phases out above $4.09M in purchases) - 2026

Educational Only: This information is for educational purposes. Consult a qualified financial advisor or tax professional before implementing.

Last reviewed: April 2026

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Sources

Internal Revenue Service, Rev. Proc. 2025-32
2026 inflation-adjusted amounts (tax brackets, standard deduction, estate & gift, FSA, credits)
Internal Revenue Service, Notice 2025-67
2026 retirement plan limits (401(k), IRA, SIMPLE, catch-up)
Internal Revenue Service, Rev. Proc. 2025-19
2026 HSA and HDHP inflation-adjusted limits

Educational information only. Not financial, tax, or legal advice or a recommendation. Figures are drawn from the primary sources cited above; verify current amounts with the source before acting.

Section 179 Expense Deduction

Interactive Calculator

Tax Benefit

Requirements

How to Implement

Frequently Asked Questions

Can I use Section 179 for a vehicle?

What's the difference between Section 179 and bonus depreciation?

Can I use Section 179 if my business has a loss?

Does the equipment have to be new?

How was Section 179 changed by the OBBBA?

Annual Limit

Related business owner strategies

Sources