Can I Claim Section 179 Equipment Deduction as a Business Expense in United States?
Yes, under IRC Section 179, US businesses can immediately expense up to $2,500,000 of qualifying equipment placed in service in 2025 and $2,560,000 in 2026. The deduction is reduced dollar for dollar once total section 179 property placed in service passes $4,000,000 in 2025 or $4,090,000 in 2026. Bonus depreciation is 100% for qualified property acquired and placed in service after 19 January 2025.
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What Internal Revenue Service (IRS) says
Section 179 lets a taxpayer elect to expense the cost of qualifying property (equipment, off-the-shelf software, qualified improvement property) in the year placed in service, up to annual limits indexed to inflation. The deduction cannot exceed business taxable income (no loss creation). Qualified section 179 real property and qualified improvement property are also eligible. The business must place the property in service and elect the deduction on Form 4562 in the year of purchase. The deduction cannot exceed the taxable business income for the year, and any excess is carried forward.
When you can claim
- Computers, laptops, phones, equipment under the annual cap
- Off-the-shelf software (Section 179 eligible)
- Qualified Improvement Property (interior commercial improvements)
- Heavy SUVs/trucks over 6,000 lb GVWR (special cap of $32,000 in 2026 and $31,300 in 2025)
When you cannot claim
- Property used 50% or less for business
- Buildings and structural components
- Inventory and property held for sale
- Cars below 6,000 lb GVWR (depreciation limits apply)
- The part of an SUV cost above the $32,000 section 179 cap (2026) where the vehicle weighs over 6,000 lb GVWR
Good to know
Important: Bonus depreciation is back at 100 percent for qualified property acquired and placed in service after 19 January 2025 under Public Law 119-21 (the One Big Beautiful Bill Act). A taxpayer can elect a 40 percent allowance for the first tax year ending after that date. Property acquired before 20 January 2025 is limited to 40 percent for property placed in service in 2025. Section 179 can be used before bonus depreciation, and it is limited to business income.
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