Tax
Section 179 Deduction
A federal tax election that lets businesses immediately expense the cost of qualifying property — equipment, vehicles, software — rather than depreciate it.
Definition
Section 179 is one of the most-used small-business tax tools. The annual deduction limit is substantial but capped, and the deduction phases out for businesses purchasing very large amounts of property in a single year. Bonus depreciation is the related — and sometimes better — alternative.
When It Matters
Anytime you purchase meaningful business equipment, vehicles, or off-the-shelf software.
Common Questions
When does Section 179 beat bonus depreciation?
When you want flexibility to deduct only part of an asset's cost in the current year — Section 179 lets you elect amounts; bonus depreciation is all-or-nothing per asset class.