SECTION 179
Financed equipment still qualifies.
Section 179 lets your business write off the full price of equipment on this year’s taxes, instead of a little at a time over several years. And it still works when you finance or lease the equipment.
HOW IT WORKS
Write off the whole price this year
Normally, when a business buys equipment, the IRS makes you spread the write-off over several years — often five or seven. Section 179 lets you write off the whole price in the year you start using it. A bigger write-off this year means less taxable profit, and a smaller tax bill, this year.
It counts when you start using it
What matters is when the equipment is delivered, set up and working — not when it is paid off. That is why financing and Section 179 work so well together.
It has to be for your business
The equipment must be used for business more than half the time. If it is also used personally, you can only write off the business share.
It can’t be more than your profit
Section 179 can bring your business profit down to zero, but not below. Anything left over carries forward to next year.
TAX YEAR 2026
The 2026 numbers at a glance
MOST YOU CAN WRITE OFF
$2,560,000
LIMIT SHRINKS ABOVE
$4,090,000
BONUS DEPRECIATION
100%
HEAVY SUV LIMIT
$32,000
In 2026 you can write off up to $2,560,000 of equipment under Section 179. If your business puts more than $4,090,000 of equipment into use in the year, that limit shrinks dollar for dollar, and it is gone at $6,650,000. Most small businesses never get close. Bonus depreciation covers anything Section 179 does not: it has no spending limit, and since the 2025 tax law it is permanently 100% for equipment bought after January 19, 2025. The SUV limit is for SUVs weighing 6,001 to 14,000 lbs. The deadline: the equipment has to be in use by December 31, 2026.
WITH A LEASE
Take the write-off now, pay over time
This is the big advantage. If the equipment is in use this year, you can write off the full price on this year’s taxes — even though you will pay for it in monthly payments over the next few years. You don’t need to pay the whole price up front to get the write-off.
It depends on the kind of financing. With an equipment finance agreement or a $1 buyout lease, you end up owning the equipment, so you can usually use Section 179. With a fair-market-value lease, which works more like a rental, you usually deduct each payment as a business expense instead. That helps too, just in a different way.
Tell us you want to use Section 179 when you apply. We will set up the financing to fit and put it in writing so your accountant can review it.
We’re not tax advisors
American Capital Group is an equipment finance company. Nothing on this page is tax advice or a promise about what you can write off. That depends on your business, your profit and the rules for that tax year.
The IRS raises the limits a little every year for inflation. The calculator below shows which year’s numbers it uses, but check them with the IRS before you rely on them:
IRS Publication 946, How To Depreciate Property — then confirm it with your own CPA.
ESTIMATE IT
See what you could save
Pick the tax year, enter how much equipment you are buying, and choose your tax bracket. The calculator uses Section 179 first, then bonus depreciation for anything left over, then regular depreciation — the same order the IRS uses — and shows how much tax that could save you.
One thing it can’t know is your profit. Section 179 can’t be more than your business profit for the year (the rest carries forward), so treat the result as the most you could save, not a guarantee.
WHAT YOU CAN WRITE OFF THE FIRST YEAR
SECTION 179
$100,000
BONUS DEPRECIATION
$0
REGULAR DEPRECIATION
$0
TOTAL WRITE-OFF
$100,000
WHAT THAT SAVES
ESTIMATED TAX SAVINGS
$24,000
YOUR REAL COST AFTER SAVINGS
$76,000
Tax year 2026. You can write off up to $2,560,000 under Section 179. That limit shrinks if you put more than $4,090,000 of equipment into use in the year. Bonus depreciation covers everything left over. The IRS updates these numbers every year — check them against IRS Publication 946 and your own CPA before you file. This is an estimate, not tax advice, and not an offer of financing.
TIMING
The deadline is December 31 — and it means in use
To write equipment off on this year’s taxes, it has to be delivered, set up and working by December 31. Ordering in late December and getting it in January pushes the write-off back a whole year. That is the most expensive mistake we see.
Leave time for delivery and setup
We usually approve financing the same or next business day, but the equipment still has to arrive and be ready to use. Ask your vendor how long delivery takes and plan backward from that.
Or start the payments later
If the point is to have the equipment working now and the payments beginning later, that is a separate program — deferred payment options — and it can run alongside this one.
QUESTIONS
Section 179, in plain English
The questions business owners ask us most, answered without the tax jargon.
What is Section 179, in plain English?
It is a tax rule that lets your business write off the full price of equipment on this year's taxes, instead of a little at a time over five, seven or more years. A bigger write-off this year means less taxable profit this year, and so a smaller tax bill now.
Can I still use it if I finance or lease the equipment?
Yes, as long as you will own the equipment at the end -- for example an equipment finance agreement or a $1 buyout lease. You can write off the full price this year even though you pay for it monthly. A rental-style lease (a fair market value lease) works differently: you do not use Section 179, and you write off each lease payment as a business expense instead.
What kind of equipment qualifies?
Most equipment you buy for your business: machinery, tools, computers, off-the-shelf software, office furniture, medical, restaurant and construction equipment, and business vehicles. New and used both count, as long as it is new to you. Land and buildings do not.
How much can I write off in 2026?
Up to $2,560,000 under Section 179. That limit only starts to shrink if your business puts more than $4,090,000 of equipment into use in the year, and it is gone completely at $6,650,000. Most small businesses never get close.
What is bonus depreciation, and how is it different?
It is a second write-off that picks up whatever Section 179 does not cover. It has no spending limit, and since the 2025 tax law it lets you write off 100% of equipment bought after January 19, 2025. Unlike Section 179, it is not limited to your profit for the year.
What is the deadline?
The equipment has to be delivered, set up and in use by December 31, 2026. Ordering it or paying for it by then is not enough. Leave time for shipping and installation.
What if my profit is less than the equipment cost?
Section 179 can only bring your business profit down to zero, not below. Whatever is left over carries forward to next year. Bonus depreciation does not have that limit, so your accountant can use the two together to get the result that suits you best.
Does the equipment have to be used only for business?
It has to be used for business more than half the time. If it is also used personally, you can only write off the business share. For example, 80% business use means you can write off 80% of the cost.
What about trucks and SUVs?
Heavy SUVs (6,001 to 14,000 lbs) are capped at $32,000 under Section 179 for 2026, though bonus depreciation can often cover more of the price. Some work vehicles are not capped at all -- for example a pickup with a bed at least 6 feet long, a cargo van with no seats behind the driver, or a vehicle that seats more than nine behind the driver. Regular passenger cars have much lower limits. Check with your accountant for your specific vehicle.
How much will I actually save?
A rough rule: the amount you write off, multiplied by your tax bracket. Writing off $100,000 at a 24% federal rate saves about $24,000 in federal tax. Use the calculator on this page for your own numbers.
Does my state follow the same rules?
Not always. Some states set much lower limits or do not allow bonus depreciation. California, for example, caps Section 179 at $25,000 and does not allow bonus depreciation. Your accountant will know your state's rules.
How do I claim it?
Your accountant claims it on IRS Form 4562, filed with your business tax return. Keep the equipment invoice and your finance or lease agreement, which show what you bought, what it cost and when it went into use.
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02
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