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Purchase Equipment in 2026 Using Your Section 179 Tax Benefit
Section 179 Allowance
- Any new or used equipment purchased in 2026 can be deducted in full (up to a total of $2,560,000) in year 1 if the total amount of applicable assets purchased does not exceed $4,000,000.
- Once the $4,090,000 (cost) threshold is surpassed, the Section 179 allowable deduction ($2,500,000) will begin to be phased out and will be totally phased out at $6,650,000 (cost) of current year additions.
- The increased allowance applies to units contracted for and put into service through December 31, 2026. The balance of equipment investment above $4,090,000 is eligible for Standard MACRS depreciation.
Bonus Depreciation
The applicable bonus depreciation percentage will now be 100% for property placed in service after January 19, 2026. Bonus depreciation applies to new and used equipment.
Example of an Equipment Purchase of $25,000:
| Purchase Price | $25,000 |
| 1st year Section 179 allowance | $2,560,000 |
| Total 1st year deduction | $25,000 |
| Potential 1st year tax savings (21% Tax Bracket) | $5,250 |
| After Tax Cost of Equipment | $19,750 |
*Please consult your own tax advisor regarding the application of the tax laws to your specific situation.
