Bonus depreciation, Section 179, or plain MACRS? Compare all three.

1. The purchase

Business use of 50% or less disqualifies bonus depreciation and Section 179 entirely — see the flag below if it applies. The recovery period only affects the plain-MACRS column.

2. Section 179 phase-out inputs

The phase-out is based on your TOTAL qualifying purchases for the year, not just this one asset — enter everything else you bought that would also qualify.

3. Income and rate

Income can be negative — enter a negative number for an expected loss year. This is what decides whether bonus depreciation creates an NOL and whether a Section 179 election carries forward.

Comparison

What this does not cover

• Not a full tax return. This estimates the cash tax effect of one asset's deduction only — not total tax liability, other deductions or credits, self-employment or payroll tax, AMT, or state tax (state conformity to bonus depreciation varies widely).
• No Alternative Depreciation System (ADS) modeling. At 50% or less business use, neither bonus depreciation nor Section 179 is available — this calculator flags that but does not compute the slower straight-line ADS figures.
• No luxury-auto caps. Passenger vehicles are subject to separate depreciation dollar caps regardless of these elections; this calculator does not apply them.
• No net operating loss (NOL) or Section 179 carryforward valuation. Both are flagged when they occur, but their value in a future year — including the 80%-of-taxable-income limit on a post-2017 NOL — is left to a tax professional.

Common questions

What is 100% bonus depreciation, and is it really permanent now?

The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, made 100% bonus depreciation permanent for qualifying tangible property (20-year class life or less, including used property) both acquired and placed in service after January 19, 2025. Before OBBBA, bonus depreciation was scheduled to fall to 40% for 2025 acquisitions under the prior TCJA phase-down.

What is the difference between bonus depreciation and a Section 179 election?

Bonus depreciation is all-or-nothing at 100% for an entire class of property, is not limited by taxable income, and can create or increase a net operating loss (NOL). Section 179 lets you elect a specific dollar amount, asset by asset, up to an annual limit that phases out once total qualifying purchases exceed a threshold — but it is capped at your business's taxable income and cannot create a loss; any amount you can't use carries forward as a Section 179 deduction, still income-limited every future year.

What are the 2025 and 2026 Section 179 limits?

For 2025: a $2,500,000 limit, phasing out dollar-for-dollar once total qualifying purchases for the year exceed $4,000,000. For 2026 (inflation-adjusted): a $2,560,000 limit and a $4,090,000 phase-out threshold.

What happens if my deduction is bigger than my taxable income?

It depends which path. A bonus-depreciation or MACRS deduction that exceeds taxable income can create or increase a net operating loss (NOL), which carries forward and can offset up to 80% of a future year's taxable income under current law, with no carryback for most businesses. A Section 179 election that exceeds taxable income is different: the excess is simply not usable this year and carries forward as a SECTION 179 deduction, still limited by taxable income in every future year you claim it — not an NOL.

Does this work for a vehicle or a mixed-use asset?

Only if business use is above 50%. Property used 50% or less for business does not qualify for bonus depreciation or Section 179 at all — it must use the slower, straight-line Alternative Depreciation System instead, which this calculator does not model; it only flags the condition. This tool also does not apply the separate luxury-auto depreciation caps that limit passenger vehicles regardless of these elections.

Is this tax advice?

No. This calculator applies the published federal bonus-depreciation, Section 179, and MACRS rules to the numbers you enter. It estimates federal income tax only — state conformity to bonus depreciation varies widely and is not modeled — and it is not a substitute for reviewing IRS guidance or consulting a qualified tax professional before you elect any option on a filed return.