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Evolve Capital Finance helps businesses secure funding faster. Our technology-driven process keeps your deal moving so you can focus on growth.

What is the Section 179 deduction limit for 2026?

For tax year 2026 the Section 179 limit is $2,560,000. The limit drops dollar for dollar once total qualifying equipment placed in service during the year exceeds $4,090,000, and it is fully phased out at $6,650,000. The IRS set these inflation-adjusted figures in Revenue Procedure 2025-32.

What is the Section 179 deadline for 2026?

For calendar-year businesses, the equipment must be placed in service by December 31, 2026. Placed in service means delivered, set up and ready for business use. Ordering, signing or paying before December 31 is not enough. Fiscal-year businesses use the end of their own tax year.

Can I take Section 179 on financed equipment?

Yes, when the financing makes your business the owner for tax purposes. Equipment loans, equipment finance agreements and $1 buyout leases generally qualify, and you can deduct the full purchase price even though you pay over time. Fair market value leases generally do not qualify because the lessor owns the equipment. Evolve Capital Finance offers all three structures, so you can pick the one that fits your tax plan.

Does used equipment qualify for Section 179?

Yes. Used equipment qualifies if it is new to your business, used more than 50% for business and not bought from a related party.

Should I use Section 179 or bonus depreciation?

Many businesses use both. Section 179 is elected asset by asset and is limited to business taxable income. Bonus depreciation is 100% for property acquired and placed in service after January 19, 2025, has no dollar limit and can create a loss. Together they let most businesses write off the full cost of qualifying equipment in 2026. Your tax professional decides the mix.

Can Section 179 create a tax loss?

No. Section 179 cannot exceed your business taxable income for the year, and any excess carries forward. Bonus depreciation has no income limit, so it can create a loss that may be carried forward.

Do trucks and SUVs qualify for Section 179?

Many do. SUVs rated between 6,001 and 14,000 lbs gross vehicle weight are capped at $32,000 of Section 179 in 2026, and bonus depreciation can cover the rest. Work trucks and vans built for business use are generally not subject to the SUV cap. Passenger cars have lower annual depreciation limits.

Does California follow the federal Section 179 rules?

No. California limits Section 179 to $25,000, phases it out once qualifying purchases exceed $200,000, and does not allow bonus depreciation. Your California deduction will usually be smaller than your federal one, and the rest is depreciated over the normal schedule on your state return.

How do I claim the Section 179 deduction?

Your tax professional elects Section 179 on IRS Form 4562 (Depreciation and Amortization) with your 2026 return. Keep the invoice, financing documents and proof of the date the equipment went into service.

Will applying for financing affect my credit score?

No. Prequalification with Evolve Capital Finance uses a soft credit pull, which does not affect your credit score. All financing is subject to full underwriting, and approval, rates and terms are not guaranteed.

Tax year 2026

Section 179 Deduction 2026: Calculator, Limits & Financing

Section 179 lets a business deduct the full cost of qualifying new or used equipment in the year it is placed in service, instead of depreciating it over several years. For tax year 2026 the deduction limit is $2,560,000, it begins phasing out once total equipment placed in service tops $4,090,000, and the equipment must be in service by December 31, 2026 for calendar-year businesses. Financed equipment qualifies when the financing makes your business the owner, such as an equipment loan, an equipment finance agreement or a $1 buyout lease.

Calculate my savings

Prequalification uses a soft credit pull and won't affect your credit score.

Updated October 15, 2026 · Figures from IRS Rev. Proc. 2025-32 and Publication 946

Time left to place equipment in service

Deadline: December 31, 2026, 11:59 PM your time. Equipment has to be delivered and working, not just ordered.

Don't wait for December

Approval, vendor scheduling and freight all take time. Equipment that arrives January 2 counts for 2027, not 2026.

2026 Section 179 limits at a glance

2026 Section 179 limits and rules
Section 179 deduction limit	$2,560,000
Phase-out begins at	$4,090,000 placed in service
Fully phased out at	$6,650,000 placed in service
Heavy SUV limit (6,001–14,000 lbs GVW)	$32,000
Bonus depreciation	100% (property acquired after Jan. 19, 2025)
Deadline	In service by Dec. 31, 2026
Business use required	More than 50%
How to claim	IRS Form 4562
California	$25,000 limit, no bonus depreciation

Section 179 calculator for 2026

See your first-year deduction, what it's worth at your tax rate, and how many monthly payments the savings could cover if you finance.

Equipment cost

New or used, placed in service by Dec. 31, 2026.

Your tax rate

Business taxable income (optional)

Use 100% bonus depreciation on anything Section 179 doesn't coverMy business files taxes in California

Financing it?

Down payment

Term

Credit

Estimated 2026 federal tax savings

$24,000

That's about 12 months of payments.

Section 179 deduction: $100,000
Bonus depreciation: $0
First-year deduction: $100,000
Net cost after tax savings: $76,000
Extra savings vs. regular depreciation: $20,570
Est. payment (60 mo, 10% down): $2,025/mo

Prequalification won't affect your credit score.

Estimates only, not tax advice. Federal figures use 2026 IRS limits and assume the equipment qualifies and is placed in service by Dec. 31. Payments use indicative rates; final terms depend on underwriting. Confirm with your tax professional.

Does financed equipment qualify for Section 179?

You can deduct the full price of financed equipment in 2026 even though you pay over time, as long as the financing makes your business the owner. Evolve offers all three structures below.

Financing structure	Tax owner	Section 179?
Equipment loan or equipment finance agreement (EFA)	Your business	Generally yes
$1 buyout lease	Your business (treated as a purchase)	Generally yes
Fair market value (FMV) lease	The lessor	Generally no. Payments are usually deducted as a business expense instead.

How to use Section 179 before December 31, 2026

1
Estimate your savings
Enter the equipment cost and your tax rate in the calculator to see your first-year deduction and how many monthly payments the tax savings could cover.
2
Prequalify with a soft credit pull
Apply online. Prequalification uses a soft credit pull, so it does not affect your credit score. All financing is subject to full underwriting.
3
Choose a structure that makes you the owner
If you want Section 179, pick an equipment loan, an equipment finance agreement or a $1 buyout lease. A fair market value lease generally does not qualify.
4
Put the equipment to work by December 31, 2026
Ordering or paying is not enough. The equipment has to be delivered, set up and ready for business use within the tax year. Leave time for approval, vendor scheduling and freight.
5
Claim it on your return
Your tax professional elects Section 179 on IRS Form 4562 with your 2026 return.

Equipment that qualifies

New and used both count, as long as it's new to your business and used more than 50% for business.

What doesn't qualify

Land and buildings (some building improvements can qualify, so ask your tax professional)
Equipment used 50% or less for business
Equipment bought from a related party
Equipment placed in service after December 31, 2026

Section 179 vs. bonus depreciation in 2026

Most businesses can write off 100% of qualifying equipment in 2026 by using both. Here's how they differ.

Rule	Section 179	Bonus depreciation
2026 limit	$2,560,000	No dollar limit
Income limit	Can't exceed business taxable income. The excess carries forward.	None. It can create a loss.
Phase-out	Starts at $4,090,000 placed in service	None
How it applies	You elect it, asset by asset	Automatic unless you elect out by class
New and used equipment	Both	Both, if new to you
California	$25,000 limit	Not allowed

Section 179 in California

California doesn't follow the federal numbers. The state caps Section 179 at $25,000, phases it out once qualifying purchases pass $200,000, and doesn't allow bonus depreciation. Expect a smaller deduction on your California return than on your federal one, and plan your cash flow with that in mind.

Evolve Capital Finance is based in Santa Monica and licensed in California (License# 60DBO 105097).

Selling equipment? Put Section 179 in every quote

Year-end is when buyers act on Section 179. Join our free vendor program to offer financing at the point of sale, with your own application link, QR code and co-branded flyer, and track every deal in your portal.

See the vendor program

Frequently asked questions

Lock in your 2026 deduction

Prequalify in one online application. It's a soft credit pull, so your credit score isn't affected.

Sources

This page is general information, not tax, legal or accounting advice. Section 179 eligibility depends on your business, the equipment and how it's financed, so confirm with your tax professional. All financing is subject to credit approval and full underwriting; approval, rates, terms and timing are not guaranteed.