Section 179 Deduction



Internal Revenue Service Federal
Businesses that buy new equipment can take the Section 179 Deduction on their taxes. The Internal Revenue Service (IRS) manages this program.

All businesses that buy or lease less than $2.5 million in equipment qualify for the deduction. A business can deduct up to $1 million in the year the equipment is first bought or leased. Bonus deductions are available until 2022 for equipment that exceeds the deduction limit. The deduction is taken before the bonus.

The Section 179 Deduction covers new and used equipment. The bonus depreciation covers only new equipment. The equipment must be for business purposes more than 50% of the time to qualify.

You cannot claim this credit if you have claimed state tax credits for your equipment. Businesses in some areas, including the Liberty Zone and Empowerment Zones, can deduct an additional $35,000.

Most tangible goods qualify for the Section 179 Deduction, including (but not limited to):
  • Equipment (machines, etc) purchased for business use
  • Tangible personal property used in business
  • Business Vehicles with a gross vehicle weight in excess of 6,000 lbs
  • Computers
  • Computer Software (off the shelf)
  • Office Furniture
  • Office Equipment
  • Property attached to your building that is not a structural component of the building (e.g. a printing press, large manufacturing tools and equipment)
  • Partial Business Use (equipment that is purchased for business use and personal use - generally, the deduction will be based on the percentage of time you use the equipment for business purposes.)

For more information, contact:

Internal Revenue Service
Taxpayer Assistance Center
290 Broadway
New York, NY 10007
Phone: (212) 4361000

Learn which permits, licenses and regulations matter to you

Use the Step by Step tool to get an exhaustive list of requirements that matter to you.