Section 179: How to Deduct Equipment Purchases the Year You Buy

01What Section 179 Does

It lets you deduct the full cost of qualifying equipment in the year you put it into service, instead of depreciating it over its useful life. That front-loaded deduction can meaningfully lower a profitable year's taxes.

02What Qualifies

Business equipment, machinery, computers, off-the-shelf software, and certain vehicles generally qualify. It must be used more than half the time for business. See the IRS Publication 946 for specifics.

03The Limits

There's an annual dollar cap and a spending threshold above which the deduction phases out. It's built for small and mid-sized businesses, not massive capital programs.

04Section 179 vs. Bonus Depreciation

Bonus depreciation is a related tool with its own rules. Sometimes they're used together. Which comes first affects the outcome, so it's worth planning.

05Using It Strategically

Because it's optional, you can time purchases and elect it in years when the deduction helps most. Don't buy equipment just for the write-off — but if you need it, timing matters.

This article is general information, not individualized tax, legal, or financial advice. Every situation is different — reach out and we'll look at yours directly.