Section 179 Deduction Calculator

The heavy-vehicle limit is a patch on an old loophole. Passenger cars have been subject to the section 280F "luxury automobile" limits since 1984, which cap annual depreciation at a few thousand dollars. Vehicles over 6,000 lbs gross vehicle weight were written out of those limits because they were assumed to be work trucks, and for years that let business owners expense large SUVs in full.

Congress responded in 2004 with a dedicated section 179 cap on heavy SUVs — $25,000, indexed, and $32,000 for 2026. The cap did what it was meant to, right up until bonus depreciation returned at 100%.

Today the cap constrains almost nothing. Section 179 stops at $32,000 on a heavy SUV, and bonus depreciation then takes the entire remaining basis in the same year. The practical result is a full first-year write-off on a vehicle Congress specifically legislated to prevent expensing in full. The limit that actually matters for vehicles is the 50% business-use test, and the recapture that follows if use later falls below it.

With bonus depreciation restored to 100% by the One Big Beautiful Bill Act for property acquired after 19 January 2025, section 179 produces the same headline number as bonus for most small purchases. That has led to a reasonable question: why elect it at all?

The answer is control. Bonus depreciation is automatic and applies to every asset in a recovery class; electing out is done for the whole class, not one asset. Section 179 is elected asset by asset, and for any amount you choose. If you want to deduct exactly enough to bring taxable income to a particular figure — to stay inside a QBI threshold, to preserve a credit, to avoid wasting deductions against income already sheltered — section 179 is the instrument with a dial on it.

The taxable income limit cuts both ways for the same reason. Section 179 cannot create a loss, which is a constraint when you want the deduction and a protection when you do not. Bonus depreciation will happily push a business into a net operating loss, and an NOL is worth considerably less than a current deduction: it carries forward, offsets only 80% of future taxable income, and does nothing for this year's cash.

Every dollar of accelerated depreciation is a dollar you cannot deduct in a future year. This is a timing benefit, and its value is the time value of money plus any difference between your rate now and your rate later. A business expecting to be considerably more profitable in three years may be better off spreading deductions forward rather than pulling them into a low-rate year.

Recapture is the sharper risk. If business use of an asset falls below 50% before the end of its recovery period, the excess of what you deducted over straight-line depreciation is recaptured as ordinary income. For a vehicle bought in a busy year and driven mostly personally two years later, that bill arrives without warning.

State conformity is the other frequent surprise. Many states decouple from federal bonus depreciation entirely, and several cap section 179 far below the federal figure, so a full federal write-off can sit alongside a state return that still depreciates the asset over seven years.