Can I use Section 179 to create a loss?

No — Section 179 is limited to taxable business income. If you'd be in a loss after the deduction, the unused portion carries forward. Bonus depreciation has no such limit and CAN create or expand a net operating loss.

Does this work on a heavy SUV?

Partially. Vehicles over 6,000 lbs GVW (most full-size SUVs and trucks) qualify for up to $30,500 (2024) in Section 179, plus bonus depreciation on the rest. Vehicles under 6,000 lbs are subject to luxury auto limits — Section 179 capped at ~$12,400 first year. Verify GVW on the door sticker before relying on the deduction.

Is Section 179 elective?

Yes — you elect it on Form 4562. The IRS won't auto-apply. Elect when income is high (current bracket value > expected future bracket value). Don't elect when you're in a low-income year and depreciation deductions would be more valuable spread across higher-income future years.

Tax · free calculator

Section 179 deduction calculator

Compute Section 179 immediate expensing for business equipment vs MACRS depreciation, including phase-out at the $3.13M cap (2024).

Equipment cost

Total qualifying purchases

Used for phase-out. Phase-out starts at $3.13M total purchases.Marginal tax rate %

MACRS recovery years

5 (vehicles, equipment), 7 (office), 39 (real property).

Section 179 tax saved year 1

Show the work

Eligible Section 179 deduction$250,000
MACRS year 1 tax saved$16,000
Year 1 cash advantage$64,000

Section 179 — full expensing in year 1

Section 179 lets businesses immediately deduct the FULL cost of qualifying equipment in the year placed in service, instead of depreciating over 5-39 years. For 2024: up to $1.22M with phase-out starting at $3.13M total qualifying purchases.

What qualifies

Tangible personal property: machines, equipment, vehicles >6,000 GVW
Off-the-shelf software (custom-developed = no)
Improvements to nonresidential real property: roofs, HVAC, security
DOES NOT qualify: residential real estate, intangibles other than software

The phase-out

If total qualifying purchases exceed $3.13M:

Reduce Section 179 limit dollar-for-dollar over the threshold
Above $4.35M total: Section 179 disappears entirely
Excess goes through bonus depreciation (60% in 2024) + MACRS

Section 179 vs Bonus Depreciation vs MACRS

Section 179: 100% year 1, requires income to deduct against (no NOL creation)
Bonus depreciation: 60% year 1 in 2024 (phasing down: 40% in 2025, 20% in 2026, gone by 2027), CAN create NOL
MACRS: 5-39 year cost recovery, default if you don't elect 179 or take bonus

For business owners with positive income: Section 179 typically wins. For NOL situations: bonus depreciation is better.

Export

CSV Printable PDF Embed Not sure which calc you need? Ask →

Related calculators

Keep the math moving

Tax

1099 quarterly tax estimator

Estimate your federal quarterly tax payments as a 1099 contractor — including self-employment tax, federal income tax, and the qualified-business-income (QBI) deduction.

Tax

Capital gains step-up tax savings

Compute the federal capital gains tax SAVED via the step-up in basis at death — comparing inherited-and-sold vs gifted-during-life on appreciated property.

Tax

SEP-IRA vs Solo 401(k) max contribution

Compare the maximum tax-deductible retirement contribution for self-employed under SEP-IRA vs Solo 401(k) at your net SE income.

Tax

Estimated tax safe harbor calculator

Compute the minimum federal estimated tax payments to avoid the underpayment penalty — using the lesser of 90% of current year or 100/110% of prior year.

Tax

Foreign earned income exclusion calculator

Compute the federal tax savings from the Foreign Earned Income Exclusion (FEIE) for US citizens working abroad — earned income up to $126,500 (2024).

Tax

Depreciation recapture tax calculator

Compute the depreciation recapture tax owed on rental property sale — Section 1250 unrecaptured gain at 25% federal flat plus state.