# What Is the Section 179 Deduction?

The Section 179 deduction lets a business deduct the full cost of qualifying equipment, vehicles and software in the year it's placed in service, instead of depreciating it over several years. For tax years beginning in 2026, the limit is $2,560,000, reduced dollar for dollar once total qualifying purchases exceed $4,090,000. Heavy SUVs are capped at $32,000.

## Key takeaways

- 2026 limits: $2,560,000 maximum deduction, phasing out above $4,090,000 of qualifying purchases; heavy SUVs capped at $32,000 (2025: $2,500,000, $4,000,000 and $31,300).
- Property must be placed in service, not just bought or ordered, during the tax year, and used more than 50% for business.
- Pickups and vans over 6,000 lbs GVWR escape the passenger-car depreciation caps; a pickup with a 6-foot or longer bed also escapes the $32,000 SUV cap.
- The deduction can't exceed your taxable business income for the year; the excess carries forward.
- If business use later drops to 50% or less, part of the deduction is recaptured as income.

> **Which year these numbers are for**
>
> Limits are for **tax years beginning in 2026** (Rev. Proc. 2025-32 and Publication 946), with 2025 figures shown for comparison, checked October 12, 2026. The One Big Beautiful Bill Act (P.L. 119-21, July 4, 2025) raised the base limit to $2,500,000 starting in 2025, indexed for inflation after that. This is general information, not tax advice. Talk to a CPA or enrolled agent before you buy for tax reasons.

## How Section 179 works

Normally, when you buy a truck, an excavator or a jetter, you can't deduct the cost all at once. You recover it through [depreciation](https://www.brix.so/learn/depreciation) over the asset's recovery period, usually five or seven years for contractor equipment. Section 179 is an election that lets you skip the wait and deduct some or all of the cost in the first year, on Form 4562.

It's an election, not an automatic rule. You choose which assets to expense and how much of each, up to the limits. Anything you don't expense is depreciated normally, or picked up by [bonus depreciation](https://www.brix.so/learn/bonus-depreciation).

**Section 179 limits by tax year**

| Limit | Tax years beginning in 2025 | Tax years beginning in 2026 |
| --- | --- | --- |
| Maximum Section 179 deduction | $2,500,000 | $2,560,000 |
| Phase-out starts when qualifying purchases exceed | $4,000,000 | $4,090,000 |
| Cap for heavy SUVs (over 6,000 lbs, up to 14,000 lbs GVWR) | $31,300 | $32,000 |

_Sources: IRS Publication 946 (2025), What's New for 2025 and 2026; Rev. Proc. 2025-32, section 4.24._

## What qualifies for Section 179?

- **Tangible business equipment:** tools, compressors, generators, jetters, lifts, skid steers, mini excavators, trailers, mowers, ladder racks, shelving and office equipment.
- **Business vehicles:** trucks, vans and SUVs, subject to the weight rules below.
- **Off-the-shelf software** you buy for the business.
- **Qualified real property,** if you elect it: qualified improvement property (interior improvements to nonresidential buildings) and roofs, HVAC, fire protection and alarm systems, and security systems added to nonresidential buildings after they were first placed in service.

Land, buildings themselves, property used outside the U.S., and property bought from a related person (spouse, parents, kids, or a company you control) don't qualify. Used equipment does qualify, as long as it's new to you.

## Section 179 for trucks, vans and SUVs: the 6,000-lb rule

Vehicle weight decides how much you can write off. The number that matters is **gross vehicle weight rating (GVWR)**, which is printed on the sticker inside the driver's door jamb, not the curb weight.

**How vehicle type changes the first-year write-off (2026)**

| Vehicle | Examples | First-year limit |
| --- | --- | --- |
| Car, small SUV, light pickup or van, 6,000 lbs GVWR or less | Sedans, compact pickups, small crossovers | Passenger auto caps apply: $20,300 in year one if bonus depreciation applies, $12,300 if not, for vehicles placed in service in 2026 (Rev. Proc. 2026-15). |
| Heavy SUV, more than 6,000 and up to 14,000 lbs GVWR | Full-size SUVs, some crew-cab pickups with short beds | Section 179 capped at **$32,000** for 2026. Remaining cost may qualify for bonus depreciation. |
| Pickup over 6,000 lbs GVWR with a cargo bed at least 6 feet long (not reachable from the cab) | Many full-size work pickups with standard or long beds | Not subject to the $32,000 SUV cap or passenger auto caps. Can be expensed up to the overall limit. |
| Van over 6,000 lbs GVWR with no seating behind the driver and a fully enclosed cargo area | Cargo vans used as service vehicles | Not subject to the SUV cap. Can be expensed up to the overall limit. |
| Vehicles that seat more than 9 behind the driver; qualified nonpersonal-use vehicles | Passenger vans, dump trucks, bucket trucks, flatbeds | Not subject to the SUV cap. Many heavy work trucks aren't listed property at all. |

_Source: IRS Publication 946, chapter 2 (Sport Utility and Certain Other Vehicles) and chapter 5 (Passenger Automobiles); Rev. Proc. 2026-15 for the 2026 caps. Exact eligibility depends on the specific vehicle. Confirm with your CPA._

> **Example 1: an electrician's work pickup**
>
> This is an illustrative example. In March 2026 an electrical contractor buys and puts into service a new three-quarter-ton pickup for $68,000. The GVWR is 10,000 lbs and it has a 6.5-foot bed. Her mileage log shows 90% business use.
>
> Business cost: $68,000 × 90% = **$61,200**. Because the truck is over 6,000 lbs and has a bed of at least 6 feet, the $32,000 SUV cap doesn't apply. If her business profit for 2026 is at least $61,200, she can elect to expense the full $61,200 under Section 179.
>
> The other $6,800 (the 10% personal-use share) isn't deductible.

> **Example 2: a plumber's heavy SUV**
>
> This is an illustrative example. A plumbing company owner buys a full-size SUV for $72,000, GVWR 7,300 lbs, used 100% for business. Section 179 is capped at $32,000 for this vehicle in 2026.
>
> The remaining $40,000 can generally be claimed as 100% [bonus depreciation](https://www.brix.so/learn/bonus-depreciation) if the SUV was acquired and placed in service after January 19, 2025, because vehicles over 6,000 lbs aren't subject to the passenger auto caps. Proving 100% business use for an SUV is hard, so the CPA will want a solid mileage log.

Run your own purchase through the [Section 179 calculator](https://www.brix.so/tools/section-179-calculator). If you plan to use the [standard mileage rate](https://www.brix.so/learn/mileage-deduction-for-contractors) for a vehicle, note that you can't use it for a vehicle you've claimed Section 179 on.

## The rules that limit Section 179

### More than 50% business use

You can elect Section 179 on mixed-use property only if you use it **more than 50% for business** in the year you place it in service, and you can deduct only the business-use percentage of the cost. For vehicles, a contemporaneous mileage log is what proves that percentage.

### Placed in service during the year

The asset must be ready and available for use in your business during the tax year. A truck ordered in December that arrives in January counts for next year, not this one.

### The business income limit

Your Section 179 deduction can't be more than your taxable income from the active conduct of any trade or business during the year (figured before the Section 179 deduction and the half-SE-tax deduction, and including W-2 wages). Anything over that carries forward to future years. That's a key difference from bonus depreciation, which can create a loss.

### Recapture if business use drops

If business use of the property falls to 50% or less in any year of its recovery period, you must add back part of the deduction as ordinary income on Form 4797. Selling the asset triggers depreciation recapture under the normal rules too.

## Section 179 vs. bonus depreciation

**Two ways to write off equipment in year one (2026)**

|  | Section 179 | Bonus depreciation |
| --- | --- | --- |
| How much | Up to $2,560,000 for 2026 | 100% of cost for qualifying property acquired and placed in service after Jan. 19, 2025; no dollar cap |
| Can it create a business loss? | No, limited to business income; excess carries forward | Yes |
| Pick and choose? | Asset by asset, any amount | Applies to every asset in a class unless you elect out for that class |
| Heavy SUV cap | $32,000 | No SUV-specific cap |
| Qualified real property (roofs, HVAC on nonresidential buildings) | Yes, if elected | Generally no for those items, though qualified improvement property is 15-year property and eligible |

_Sources: IRS Publication 946 (2025), chapters 2 and 3; Notice 2026-11. Many state tax codes don't follow the federal rules, so your state deduction can differ._

## Section 179 by trade

**Typical Section 179 purchases in the trades**

| Trade | Common Section 179 assets | Watch out for |
| --- | --- | --- |
| HVAC | Service vans, recovery machines, vacuum pumps, diagnostic tools, fleet software | Vans under 6,000 lbs GVWR hit the passenger auto caps. |
| Plumbing | Jetters, camera inspection systems, pipe threaders, service trucks | Equipment financed in December must be in service by December 31. |
| Roofing | Dump trailers, lifts, nail guns, crew trucks | Your own building's new roof can be qualified Section 179 real property only if it's nonresidential. |
| Electrical | Bucket trucks, wire pullers, benders, testers | Bucket trucks are generally qualified nonpersonal-use vehicles, so the listed-property rules don't apply. |
| Landscaping | Zero-turn mowers, skid steers, trailers, trucks | A truck that pulls a personal boat on weekends needs honest business-use numbers. |
| Cleaning | Carpet extractors, pressure washers, vans | Small items under your de minimis policy may be easier to expense directly. |

_Illustrative examples, not a complete list. Confirm eligibility for each asset with your tax professional._

## Common mistakes

- **Buying a truck you don't need just for the deduction.** A $60,000 write-off at a 24% bracket saves about $14,400 of income tax (plus some SE tax), not $60,000. You still spent the money.
- **Guessing GVWR.** Check the door-jamb sticker before you buy. A few hundred pounds can decide whether you're capped at $20,300 or not.
- **No mileage log.** Without records, the IRS can deny the business-use percentage, and with it the deduction.
- **Forgetting state rules.** Some states cap or don't allow federal Section 179 and bonus amounts. Check your [state tax guide](https://www.brix.so/taxes).
- **Not planning for the sale.** Expensing a truck now means the sale price is largely taxable when you trade it in later.

BRIX keeps equipment and vehicle purchases categorized and synced to QuickBooks, so your CPA sees exactly what was bought and when it went into service. BRIX doesn't decide how to depreciate assets, file taxes or give tax advice.

- [Bookkeeping and tax help](https://www.brix.so/features/bookkeeping-taxes): Keeps expenses categorized, tracks 1099 subcontractors and sales tax, and reminds you of quarterly estimated tax dates. BRIX does not file taxes or give tax advice.
- [QuickBooks sync](https://www.brix.so/integrations/quickbooks): Syncs customers, invoices and payments with QuickBooks so the books match the jobs.
- [Inventory and materials](https://www.brix.so/#use-cases): Tracks what is on the truck and in the warehouse and what needs reordering.

For year-end planning across all of your taxes, read the [contractor taxes guide](https://www.brix.so/guides/contractor-taxes), or see how [BRIX bookkeeping and tax help](https://www.brix.so/features/bookkeeping-taxes) keeps the records your CPA needs.

## Frequently asked questions

### What is the Section 179 limit for 2026?

For tax years beginning in 2026, the maximum Section 179 deduction is $2,560,000. It's reduced dollar for dollar when the cost of qualifying property you place in service during the year exceeds $4,090,000. Heavy SUVs are capped at $32,000. Source: Rev. Proc. 2025-32 and IRS Publication 946.

### What trucks qualify for the Section 179 deduction?

Trucks and vans used more than 50% for business qualify. Those over 6,000 lbs GVWR avoid the passenger auto caps, and pickups with a cargo bed of at least 6 feet, or cargo vans with no seats behind the driver, also avoid the $32,000 SUV cap. Lighter vehicles are capped at $20,300 in year one for 2026 when bonus applies.

### Can I take Section 179 on a used truck?

Yes. Used property qualifies for Section 179 as long as you didn't use it before and didn't buy it from a related person, such as your spouse, parent, child or a company you control. The business-use and placed-in-service rules still apply.

### Can I use Section 179 if my business had a loss?

No. The deduction is limited to your taxable income from active business activity, including W-2 wages. Any amount you can't use carries forward to future years. Bonus depreciation has no income limit, so CPAs often use it instead when profit is low.

### Do I have to pay for the equipment in full to claim Section 179?

No. Financed equipment qualifies as long as you bought it and placed it in service during the tax year. The deduction is based on the cost, not on how much you've paid so far. Equipment you lease usually doesn't qualify, because you don't own it; some agreements called leases are really purchases, so have your CPA look at the contract.

### What happens to Section 179 if I sell the truck later?

Because you deducted the cost, most or all of the sale price may be taxable as ordinary income through depreciation recapture. If business use drops to 50% or less before the recovery period ends, you also recapture part of the deduction, even without a sale.

### Is Section 179 the same in every state?

No. Some states limit or don't follow the federal Section 179 and bonus depreciation amounts, so your state taxable income may be higher than your federal one. Check your state's rules or ask your CPA.

## Related

- [What Is Bonus Depreciation?](https://www.brix.so/learn/bonus-depreciation)
- [What Is Depreciation?](https://www.brix.so/learn/depreciation)
- [Mileage Deduction for Contractors: 2026 Rates and Rules](https://www.brix.so/learn/mileage-deduction-for-contractors)
- [Contractor Tax Deductions: The Complete List for 2026](https://www.brix.so/learn/contractor-tax-deductions-list)
- [How Much Should You Set Aside for Taxes When You're Self-Employed?](https://www.brix.so/learn/how-much-to-set-aside-for-taxes)
- [Section 179 Calculator for Trucks, Vans and Equipment (2026)](https://www.brix.so/tools/section-179-calculator)
- [Mileage Deduction Calculator for Contractors (2026)](https://www.brix.so/tools/mileage-deduction-calculator)
- [Taxes for Contractors: The 2026 Guide for Self-Employed Trades Owners](https://www.brix.so/guides/contractor-taxes)
- [Bookkeeping for contractors that keeps your books tax-ready all year](https://www.brix.so/features/bookkeeping-taxes)
- [Quarterly Estimated Tax Calculator for Self-Employed Contractors (2026)](https://www.brix.so/tools/quarterly-estimated-tax-calculator)

## Sources

- [IRS: Publication 946 (2025), How To Depreciate Property (incl. What's New for 2026)](https://www.irs.gov/pub/irs-pdf/p946.pdf) (checked 2026-10-12)
- [IRS: Rev. Proc. 2025-32, section 4.24 (2026 Section 179 limits)](https://www.irs.gov/pub/irs-drop/rp-25-32.pdf) (checked 2026-10-12)
- [IRS: Rev. Proc. 2026-15, depreciation limits for passenger automobiles placed in service in 2026 (IRB 2026-13)](https://www.irs.gov/irb/2026-13_IRB) (checked 2026-10-12)
- [IRS: Notice 2026-11, interim guidance on 100% additional first-year depreciation](https://www.irs.gov/pub/irs-drop/n-26-11.pdf) (checked 2026-10-12)
- [IRS: Topic No. 510, Business Use of Car](https://www.irs.gov/taxtopics/tc510) (checked 2026-10-12)

---
Written by BRIX Editorial Team. Last updated 2026-10-12. General information, not tax, legal or financial advice.
Canonical: https://www.brix.so/learn/section-179-deduction