Section 179 Deduction: Limits, How It Works in 2025

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Key takeaways
- Section 179 of the Internal Revenue Code lets businesses deduct the cost of certain assets immediately rather than over time.
- Office furniture, certain vehicles, computers and off-the-shelf software are typically deductible expenses.
- The Section 179 deduction limit is $2,500,000 in 2025 and $4,000,000 in 2026.
What is the Section 179 deduction?
How the Section 179 tax deduction works
Types of assets eligible for the Section 179 deduction
- Office furniture, computers and off-the-shelf software are examples of business equipment eligible for the Section 179 deduction
. - The Section 179 deduction generally doesn’t cover real estate.
- Some vehicles, such as cargo vans, are eligible Section 179 expenses, but vehicles traditionally used for personal transportation rarely qualify.
- rent
- office supplies
- insurance
- certain startup costs
2025 Section 179 deduction limits
2025 limits | 2026 limits | |
---|---|---|
Section 179 deduction limit | $1,250,000 | $2,500,000 |
Phase-out limit | $3,130,000 | $4,000,000 |
What expenses qualify for Section 179?
- Computer software that is not custom-made or modified specifically for your company.
- Machinery and equipment.
- Livestock.
- Some vehicles.
‘Hummer tax deduction’: Which vehicles does Section 179 cover?
- It weighs more than 14,000 pounds.
- More than nine people can sit in the vehicle behind the driver’s seat.
- The vehicle has a cargo compartment 6 or more feet long, and the compartment isn't accessible from the passenger seating area.
- The vehicle “has an integral enclosure fully enclosing the driver compartment and load carrying device, does not have seating rearward of the driver's seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield.”
Does Section 179 cover real estate?
- Property used primarily for lodging.
- Roofs.
- Fire alarm and protection systems.
- Security systems.
- Ventilation, heating and air-conditioning property.
What if you don’t qualify for Section 179?
Article sources
- 1. Internal Revenue Service. Publication 946. Accessed Jul 4, 2025.
- 1. Internal Revenue Service. Publication 946. Accessed Jul 4, 2025.
- 3. Internal Revenue Service. Publication 946, How To Depreciate Property. Accessed Jul 4, 2025.
- Key takeaways
- What is the Section 179 deduction?
- How the Section 179 tax deduction works
- Types of assets eligible for the Section 179 deduction
- 2025 Section 179 deduction limits
- What expenses qualify for Section 179?
- ‘Hummer tax deduction’: Which vehicles does Section 179 cover?
- Does Section 179 cover real estate?
- What if you don’t qualify for Section 179?