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Write Off Equipment This Year

Buying $40,000 of equipment with $100,000 of taxable income lets you deduct the full $40,000 under Section 179, saving $8,800 at a 22% rate. The deduction cannot exceed taxable income, and any excess carries forward.

Results

Visualization

Cashbizly provides illustrative business estimates only. Results depend on your inputs and assumptions and are not accounting, tax, or legal advice. Consult a CPA or financial advisor before major decisions. Tax-year figures (mileage, QBI, SEP, etc.) are labelled by year and should be verified at IRS.gov.

How It Works

Section 179 allows first-year expensing of qualifying equipment instead of depreciating it. The deduction is limited to taxable business income (excess carries forward). Bonus depreciation may stack in some years. This is distinct from MACRS straight-line depreciation. Always confirm current-year limits and phase-outs at IRS.gov.

What Should You Do?

Scenario 1: a $60k purchase against $50k income deducts $50k now, $10k carries forward. Scenario 2: at 37% the same $40k saves $14,800. Scenario 3: pairing 179 with an S-Corp election can compound tax savings.

Frequently Asked Questions

179 vs bonus depreciation?

179 is capped and income-limited but elective; bonus depreciation has been phasing down — check the current year.

Can I deduct more than my income?

No — the 179 deduction is capped at taxable income; the unused portion carries to next year.

Which assets qualify?

Tangible personal property used in business — equipment, vehicles (with limits), computers. Real estate generally does not.

Authoritative References

IRS — Publication 946 — How to depreciate property, including Section 179.
IRS — Section 179 — Current Section 179 expense limits.