Alliance Funding Group Est. 1998
Section 179 Tax Deduction
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$1.22MM
Max Deduction (2026)
$3.05MM
Spending Cap (2026)
100%
Financed Equipment Eligible
Overview
What is Section 179?
Section 179 of the IRS tax code allows businesses to deduct the cost of qualifying equipment in the same year it is purchased, financed, or leased and placed into service. Instead of depreciating assets over time, this equipment tax deduction enables businesses to expense equipment immediately, which can significantly reduce taxable income and improve cash flow.
For businesses planning equipment investments, the Section 179 deduction remains one of the most effective ways to offset taxable income while acquiring the assets needed to grow, compete, and operate. Equipment can be purchased outright, financed, or leased and still qualify for the deduction.
2026 Section 179 Limits
Maximum Deduction
Up to $1.22MM
Spending Cap
$3.05MM
Phase-Out
Dollar-for-dollar above cap
Equipment Types
New & Used
Financing Eligible
Yes — leased & financed
Placement Deadline
Before year-end
Limits are adjusted annually for inflation. Consult a qualified tax advisor for your specific situation.
Calculate Your Savings
How Much Could You Save?
Use our Section 179 calculator to estimate your potential tax savings based on your equipment cost and tax bracket.
Example Scenario
A business purchasing $1.15MM in qualifying equipment at a 22% tax bracket could see:
Write-off
Tax Savings
Net Cost
Deduct up to $1.22MM in qualifying equipment costs (2026)
Spending cap of $3.05MM before phase-out begins (2026)
Applies to purchased, leased, or financed equipment
Both new and used qualifying equipment may be eligible
Equipment must be placed in service before end of tax year
Equipment financing can preserve cash while capturing tax benefits
benefits
Why Businesses Use Section 179
Application Only
$50,000 – $500,000
Immediate Tax Savings
Reduces taxable income in the year qualifying equipment is placed into service
Application Only
$50,000 – $500,000
Improved Cash Flow
Capture tax savings immediately and reinvest in operations or growth
Application Only
$50,000 – $500,000
Invest Without Paying Cash
Benefit from the deduction when equipment is financed or leased
Eligible Assets
What Equipment Qualifies?
Eligibility depends on how the equipment is used and when it is placed into service. The following categories are commonly eligible.
Machinery and capital equipment used in day-to-day business operations
Business vehicles weighing more than 6,000 lbs
Trucks and tractors used for transportation or operational support
Software and computers purchased for business use
Office equipment and office furniture
HVAC systems, fire alarms, and security systems
Signs and other qualifying business assets
Important Disclaimer: The information provided on this page is for general informational purposes only and should not be construed as tax, legal, or accounting advice. AFG does not provide tax advice. Section 179 eligibility, deduction limits, and tax treatment depend on individual circumstances and current IRS regulations. Businesses should consult with a qualified accountant or tax advisor before making any tax-related decisions.
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benefits
Why Businesses Use Section 179
Immediate Tax Savings
Reduces taxable income in the year qualifying equipment is placed into service
Improved Cash Flow
Capture tax savings immediately and reinvest in operations or growth
Invest Without Paying Cash
Benefit from the deduction when equipment is financed or leased