Home / Tax Credits / Section 179 + Bonus

Available nowBoth are now permanent. Section 179 limits were roughly doubled and 100% bonus depreciation was restored for property acquired after January 19, 2025.

IRC Sections 179 and 168(k) · Form 4562 · Deduction

Section 179 and Bonus Depreciation

Write off equipment, vehicles, and building improvements in the year you buy them

Limits roughly doubled and 100% bonus is back, permanently

Who it is forAny business buying equipment, machinery, vehicles, technology, or making improvements to a commercial building it already occupies.

What it is worthSection 179 allows up to $2,500,000 in 2025 and $2,560,000 in 2026. Bonus depreciation has no dollar cap at all.

Where it is claimedForm 4562, under IRC Sections 179 and 168(k)

Why businesses miss this one

Owners who last looked at this during the phase-down years assume bonus depreciation is stepping down to 40% and then 20%. For anything acquired after January 19, 2025 that is wrong. It is back to 100% with no sunset. The other miss is not knowing that roofs, HVAC, fire protection, and security systems on an existing building qualify for Section 179.

How the money actually works

Section 179 maximum deduction: $2,500,000 for 2025, $2,560,000 for 2026. The limit phases out dollar for dollar once you place more than $4,000,000 (2025) or $4,090,000 (2026) of qualifying property in service.
SUV-specific cap under Section 179: $31,300 for 2025, $32,000 for 2026.
Bonus depreciation is 100% with no dollar cap and no phase-down, for property acquired after January 19, 2025.
The trigger for the 100% rate is the acquisition date, not the placed-in-service date. Property acquired on or before January 19, 2025 stays on the old schedule: 40% if placed in service in 2025, 20% in 2026.
Section 179 cannot create or increase a net operating loss. It is capped at your active trade or business taxable income, with the excess carried forward indefinitely. Bonus depreciation has no such limit and can create a loss.
Ordering matters. Section 179 is applied first, then bonus depreciation runs on the remaining basis, then regular depreciation.
Section 179 covers real property that bonus cannot reach: qualified improvement property plus roofs, heating and air conditioning, fire protection and alarm systems, and security systems added to a building already in service.
Passenger vehicles are capped separately regardless of which provision you use. First-year limit with bonus: $20,200 for 2025, $20,300 for 2026.

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What to gather before you call anyone

Organized records are the difference between a preparer who says it is not worth the trouble and one who finds the money. Have these ready.

Invoices and purchase agreements showing cost and acquisition date
Written binding contracts, which fix the acquisition date on either side of the January 19, 2025 line
Placed-in-service dates for each asset
Business use logs for vehicles and other listed property
For building improvements, evidence the building was placed in service before the improvement was made
Form 4562 with each Section 179 item specifically identified

Disqualifiers and traps

These are the places claims fall apart, either at filing or on examination.

The acquisition-date cliff. Property under a written binding contract signed before January 20, 2025 gets 40% or 20% bonus, not 100%, no matter when you place it in service.
Buying equipment from a related party disqualifies it from Section 179 entirely. Related-party equipment shuffles are the classic disallowance.
On a trade-in, only the cash you added counts as cost. The carryover basis does not.
Fiscal-year filers whose 2024-2025 year began before January 1, 2025 are still on the old $1,250,000 limit.
Business use dropping to 50% or below triggers recapture on Form 4797.
Estates and trusts cannot use Section 179 at all. Noncorporate lessors are largely excluded.
Controlled group members share one set of dollar limits.
Many states decouple from bonus depreciation entirely and cap Section 179 well below the federal number. Your state result can differ sharply from the federal one.
For pass-through owners, accelerated depreciation reduces qualified business income, so the real benefit is often below the headline marginal rate.

One more thing worth knowing

Because both are now permanent, the old 'buy before it expires' pressure is gone. Time equipment purchases to your actual business need and your taxable income, not to a deadline.

Sources

Every figure on this page traces to one of these. All verified August 14, 2026.

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This is educational information, not tax advice. Big Brain Funding is not a CPA firm, an enrolled agent, or a tax preparer. We do not prepare, file, or sign tax returns, and we do not determine whether any business is eligible for any tax program. Eligibility depends on facts specific to your business and on tax law that changes. Nothing here is a promise of a refund, a credit, or a deduction amount. Confirm everything with a licensed CPA or enrolled agent before you file or amend a return.

Program details on this page were verified against official IRS and government sources on August 14, 2026. Tax law changes, sometimes mid-year. Check the linked sources for the current position before acting.