Section 179 Deduction
What is the Section 179 deduction?
The Section 179 deduction allows a business to deduct the cost of certain qualifying property in the year it is placed in service, instead of depreciating it over time. Limits and eligibility are set by the IRS and change over time.
Numetix is the expert-led, AI-powered, human-in-the-loop bookkeeping layer that tracks each asset purchase with its date and cost, so your tax professional can evaluate faster deductions.
What to know
- It applies to certain qualifying property and is subject to dollar limits
- For tax years beginning in 2025, IRS Publication 946 lists a maximum of $2,500,000, reduced when qualifying purchases exceed $4,000,000
- Record each asset in a depreciation schedule with its in-service date
Why it matters for service firms
Whether to use Section 179 is a tax planning decision with trade-offs in future years. Clean asset records make it easy for your tax professional to model the options.
Frequently asked questions
Is the Section 179 limit the same every year?
No. The IRS updates the dollar limits and related thresholds over time. Check the current Publication 946 and confirm the figures for your tax year with your tax professional.
How is Section 179 different from bonus depreciation?
Both can allow faster deductions, but they have different rules and limits. See bonus depreciation and ask your tax professional which approach fits your situation.
Official source: IRS Publication 946, How To Depreciate Property.
This page is for informational purposes only and does not constitute formal legal or tax advice. Always consult a qualified tax professional about your specific situation.
Related terms and guides: bonus depreciation, capital expenditure, depreciation schedule, and fixed assets.