Updated October 28, 2026. Quick answer: The IRS has not yet announced the 2027 section 179 limit, the most a business can deduct at once for equipment and certain other property instead of depreciating it. For 2026 it is $2,560,000, reduced dollar for dollar once the cost of section 179 property placed in service in the year exceeds $4,090,000, per Rev. Proc. 2025-32. This page updates the day the IRS publishes the 2027 amounts.
Related reading on this site: IRS Publication 225.
More on the 2026 tax figures: the 2026 section 179 limit.
What is not yet announced
As of October 28, 2026 the IRS has not published the Revenue Procedure that sets the 2027 inflation-adjusted amounts; the 2026 version was Rev. Proc. 2025-32. This page states only the 2026 figure, as a 2026 figure, and changes when the IRS publishes the 2027 Revenue Procedure.
The limit year by year
The 2025 tax law raised the base amounts and the IRS wrote them into the Revenue Procedure: “Under § 179(b)(1), the maximum amount allowable is $2,500,000.” The same paragraph sets the phase-out: “Under § 179(b)(2), the $2,500,000 amount is reduced by the amount by which the cost of § 179 property placed in service during the taxable year exceeds $4,000,000, but not below $0.”
| Year | Maximum expense | Phase-out starts when property placed in service exceeds | Source |
|---|---|---|---|
| 2025 | $2,500,000 | $4,000,000 | Rev. Proc. 2025-32, section 2, item .10 |
| 2026 | $2,560,000 | $4,090,000 | Rev. Proc. 2025-32, section 4, item .24 |
| 2027 | not yet announced | not yet announced | Awaiting the 2027 Revenue Procedure |
For 2026 the IRS wrote: “For taxable years beginning in 2026, under § 179(b)(1), the aggregate cost of any § 179 property that a taxpayer elects to treat as an expense cannot exceed $2,560,000”. The phase-out sentence reads “Under § 179(b)(2), the $2,560,000 limitation under § 179(b)(1) is reduced (but not below zero) by the amount by which the cost of § 179 property placed in service during the 2026 taxable year exceeds $4,090,000.” The sport utility vehicle cap in the same section is separate: “the cost of any sport utility vehicle that may be taken into account under § 179 cannot exceed $32,000”.
How the phase-out works
The limit shrinks by $1 for every $1 of qualifying property above the phase-out amount. For example, a business that places $4,590,000 (invented, for the computation) of section 179 property in service in 2026 is $500,000 over $4,090,000, so its limit falls from $2,560,000 to $2,060,000 (computed). At $6,650,000 of purchases the limit reaches zero (computed: $4,090,000 plus $2,560,000).
How the indexing works
The base amounts are adjusted each year. Section 179(b)(6) of the Internal Revenue Code says each dollar amount is increased by that amount multiplied by “the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins” and rounds the increase: “The amount of any increase under subparagraph (A) shall be rounded to the nearest multiple of $10,000”. Under the 2025 law the inflation adjustment starts with 2026: “These amounts are adjusted for inflation for taxable years beginning after December 31, 2025.”
Other limits apply to the deduction, and the form lines are covered on Form 4562 lines 1 to 5 and lines 6 to 13.
Common mistakes
- Using the 2025 amounts of $2,500,000 and $4,000,000 for 2026 or 2027. The 2026 amounts are $2,560,000 and $4,090,000.
- Reading the phase-out amount as the limit. The $4,090,000 is the point where the reduction starts, not a cap on purchases.
- Using a 2027 number from a vendor or blog. Until the IRS publishes the 2027 Revenue Procedure there is none.
Related: Form 4562 lines 1 to 5, section 179 limits, Form 4562, the 2027 tax brackets, and the 2027 tax numbers.
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Answer againSources
- Internal Revenue Service, Rev. Proc. 2025-32, tax year 2026 inflation-adjusted amounts, as modified by the One, Big, Beautiful Bill Act: www.irs.gov
- 26 U.S.C. 179, Election to expense certain depreciable business assets (U.S. Code, 2024 edition, U.S. Government Publishing Office): www.govinfo.gov
Read from the primary documents linked above on October 28, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the IRS itself is the right place to confirm anything consequential.