Section 179 Deduction Calculator 2025

Your Numbers

Equipment Details

Equipment / Asset Cost ($)

Business Use Percentage (%) Must be >50% for Section 179 to apply.

Tax Rates

Federal Tax Bracket (%)

State Tax Rate (%)

2025 Limits: Section 179 max = $1,220,000 • Phase-out starts at $3,050,000 total property • Bonus depreciation = 40%

Results

→ Enter your numbers to see results

Section 179 is a powerful tool — but only if you're generating enough revenue to use it. LeadLock helps you capture every lead so you never miss the business that makes these deductions worthwhile.

Try LeadLock Free → No credit card required

How the Calculator Works

Eligible cost: Asset cost multiplied by business use percentage. Business use must exceed 50% to qualify for Section 179.
Section 179 deduction: Capped at $1,220,000 for 2025. Taken first, before bonus depreciation.
Bonus depreciation: 40% in 2025 (phasing down from 60% in 2024). Applied to any eligible cost exceeding the Section 179 limit. Unlike Section 179, bonus depreciation can create or increase a net operating loss.
MACRS 5-year straight-line: Standard depreciation over 5 years using the half-year convention. Year 1 deduction = 10% of eligible cost (5-year life, half-year convention).
Tax savings: Deduction amount multiplied by combined federal + state marginal rate. Represents the actual dollar reduction in your tax bill.
Net cash benefit: Section 179 tax savings minus MACRS year-1 tax savings — the extra cash you keep in year 1 by expensing immediately.

Frequently Asked Questions

What is the Section 179 deduction limit for 2025? +

The Section 179 deduction limit for 2025 is $1,220,000. The phase-out begins when total property placed in service exceeds $3,050,000. These limits are indexed for inflation and typically adjust each year.

What is bonus depreciation in 2025? +

Bonus depreciation is 40% in 2025, down from 60% in 2024 and 80% in 2023. It phases out completely after 2026 under current law (unless Congress acts). Bonus depreciation applies to the remaining eligible cost after Section 179 is taken, and unlike Section 179, it can create a net operating loss that can be carried back or forward.

What equipment qualifies for Section 179? +

Qualifying property includes tangible personal property used in business (machinery, computers, vehicles under 6,000 lbs GVWR, office furniture and fixtures), off-the-shelf software, and qualified improvement property (interior nonresidential building improvements). Real property such as land and buildings generally do not qualify. The asset must be placed in service during the tax year, not just purchased.

Can Section 179 create a loss? +

No. Section 179 is limited by your business's taxable income — you cannot use Section 179 to generate a net operating loss. Any Section 179 deduction that exceeds your income in the current year is carried forward to future years. Bonus depreciation does not have this restriction and can create a loss.

Should I take Section 179 or bonus depreciation? +

Take Section 179 first — it has no income limitation carry-forward risk at the federal level, and some states conform to Section 179 but not bonus depreciation. Use bonus depreciation on anything above the Section 179 cap. Both can be used in the same year on different (or the same) assets. Consult your CPA to optimize based on your state's conformity rules and projected income.

Related Calculators

This calculator is for informational purposes only. Results are estimates based on simplified tax assumptions (5-year MACRS, half-year convention, no state conformity adjustments). Section 179 and bonus depreciation rules are complex and vary by state. Consult a qualified CPA or tax professional before making equipment purchase decisions.