Section 179 Deduction
An election to deduct the full cost of qualifying business equipment in the year it is placed in service instead of depreciating it over several years.
Section 179 lets a business expense qualifying tangible property and some real property improvements immediately. For 2026 the maximum is $2,560,000. The deduction phases out dollar for dollar once the property placed in service in the year exceeds $4,090,000, and it is limited to the taxpayer’s income from active businesses. Amounts disallowed by the income limit carry forward.
The asset must be used more than 50% for business, and the election is made on Form 4562. Sport utility vehicles rated between 6,001 and 14,000 pounds are capped at $32,000 for 2026. Section 179 cannot create a loss.
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