Section 179 Calculator (2026): Live Tax Savings on Equipment Financing
2026 Section 179 deduction limit: $2,560,000. Bonus depreciation: 100%. Phase-out begins at $4,090,000 in qualifying purchases. Enter equipment cost, your tax bracket, and business-use percentage. Live tax savings + effective net cost.
Updated for IRS Revenue Procedure 2025-32 (post-OBBBA). For property placed in service in 2026.
Last updated: ·By Ed Freeman, Capital Advisor. PeerSense
Equipment Inputs
Includes machinery, equipment, qualifying vehicles (over 6,000 lbs GVWR), software, and improvements.
Effective marginal federal rate. State tax savings are additional and not modeled here.
Section 179 requires >50% business use. Vehicles & mixed-use property prorate accordingly.
Restored to 100% under the One Big Beautiful Bill Act for qualified property placed in service in 2026.
First-Year Tax Outcome
- Section 179 Deduction
- $150,000
- 100% Bonus Depreciation
- $0
- Total First-Year Deduction
- $150,000
- Federal Tax Savings (24% bracket)
- $36,000
Effective Net Cost
After federal tax savings, 76.0% of list price.
About these figures
Rate, spread, leverage and term levels shown here are indicative. They reflect general conditions across our lender network as of July 21, 2026 and describe what the market has recently supported, not an outcome available to any specific borrower.
Actual pricing, leverage and terms are determined by the lender through underwriting, once full transaction materials have been reviewed. Nothing shown here is a quote, a commitment, an offer of credit or a guarantee.
PeerSense is a commercial lending advisory. We do not lend, we do not fund and we do not set pricing. Every credit decision belongs to the lender.
Market conditions move. Figures may change without notice, and a level that cleared last quarter may not clear today. What these terms mean.
Calculator estimates federal tax savings only. State tax treatment varies: many states conform partially to Section 179 / bonus depreciation, some have different limits or exclude bonus entirely. Your actual tax outcome depends on business taxable income (Section 179 is income-limited), business structure, vehicle type, and qualifying property type. This is not tax advice. Consult a CPA or tax attorney before making purchase decisions.
2026 Section 179 + Bonus Depreciation Limits at a Glance
Section 179
- Maximum Deduction$2,560,000
- Phase-Out Begins$4,090,000
- Complete Phase-Out$6,650,000
- Min Business Use> 50%
Bonus Depreciation
- 2026 Rate100%
- 2025 Rate (was)60% / 40%
- Restored ByOBBBA (2025)
- Cap on Total BasisNone
The OBBBA Change Matters
The One Big Beautiful Bill Act of 2025 restored 100% bonus depreciation (from a phased-down 60% in 2024 and 40% in 2025) and bumped the Section 179 limit to $2.56M for 2026. Together, that means an equipment purchase up to $2.56M can be 100% deducted via Section 179 in year one, and any amount above that gets 100% bonus depreciation on the remaining basis. There is no longer a tax incentive to delay equipment purchases into 2027 waiting for "better depreciation."
How to Use the Section 179 Calculator
- 1Enter your equipment cost. Include machinery, qualifying vehicles (over 6,000 lbs GVWR), software, and improvements. Vehicles under 6,000 lbs have separate annual caps and are not modeled here.
- 2Select your federal marginal tax bracket. Sole proprietors, LLCs, and S-corps use individual brackets (10–37%). C-corps use the flat 21% rate. State tax savings are additional and depend on your state's conformity to federal Section 179 / bonus depreciation.
- 3Set business-use percentage. Section 179 requires at least 50% business use. Mixed-use property prorates the qualifying basis. Vehicles used 60% for business get 60% of the deduction.
- 4Read the live outputs. Section 179 deduction (capped at $2.56M, phase-out begins at $4.09M of total purchases). 100% bonus depreciation on remaining basis. Total first-year deduction. Federal tax savings at your bracket. Effective net cost.
Section 179 vs. Bonus Depreciation: When to Use Each
For 2026 with both at 100%, the practical difference is income limitation and election flexibility. Section 179 is income-limited (you can't generate a net operating loss with Section 179 alone) but elective per asset. Bonus depreciation has no income limit but applies to all qualified property unless explicitly opted out at the asset class level.
Choose Section 179 First When
- • Total qualifying purchases under $2.56M
- • You have positive taxable income to offset
- • You want to selectively deduct specific assets and depreciate others over their useful life (asset-by-asset election flexibility)
- • You're a smaller business and want to maximize current-year deduction within the income limit
Choose Bonus Depreciation First When
- • Total purchases exceed Section 179 limits ($2.56M / $4.09M phase-out)
- • You want to generate a net operating loss (NOL) for carryback / carryforward
- • You're acquiring a fleet or production line where asset-by-asset elections aren't practical
- • You're a C-corp using bonus depreciation to reduce taxable income materially below 21% effective
What Equipment Borrowers Say
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Section 179 + Bonus Depreciation Sources (2026)
- IRS Revenue Procedure 2025-32: Inflation-adjusted Section 179 deduction limits and phase-out thresholds for tax year 2026.
- IRS Publication 946: How to Depreciate Property: Official IRS guidance on Section 179, MACRS depreciation, bonus depreciation, and listed property rules.
- IRS Section 179 Topic Page: Frequently asked questions on Section 179 election, recapture, and qualified property eligibility.
- One Big Beautiful Bill Act (OBBBA), Public Law 119-10: 2025 tax legislation that restored 100% bonus depreciation and increased Section 179 limits beginning 2026.
- U.S. Treasury, Tax Expenditures FY2026: Treasury Office of Tax Analysis estimates and methodology on accelerated depreciation provisions.
- AICPA, Bonus Depreciation Guidance: American Institute of CPAs technical guidance on Section 168(k) bonus depreciation election.
External links are provided for informational and verification purposes. PeerSense is not affiliated with and does not endorse any third-party site. Information was current at the time of publication.
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Published by PeerSense Capital Advisory · Written by Ed Freeman, Founder. Updated May 2026.
Disclaimer: This calculator estimates federal tax savings using 2026 IRS limits per Revenue Procedure 2025-32 (post-OBBBA). It does not model state tax treatment, alternative minimum tax (AMT), passive activity rules, business income limitation under Section 179, qualified business income deduction interactions, or asset class restrictions. Not all property qualifies: used property, certain real property improvements, and listed property have specific eligibility rules. This is not tax, legal, or financial advice. Consult a qualified CPA or tax attorney before making purchase or financing decisions. PeerSense is a capital advisory firm, not a lender or tax advisor. Limits cited are subject to change by future legislation or IRS administrative action.