Updated October 29, 2026. Quick answer: The section 179 limit for 2026 is $2,560,000, the most a business can deduct at once for equipment and certain other property instead of depreciating it. It is 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. The 2027 version has its own page, the section 179 limit for 2027.
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 |
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. 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.
- Forgetting the vehicle cap. A sport utility vehicle is held to its own $32,000 ceiling inside the deduction.
Related: Form 4562 lines 1 to 5, section 179 limits, Form 4562, the 2026 tax brackets, and the section 179 limit for 2027.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Talk to an advisor about tax planning
For U.S. investors with $250,000 or more in investable assets. WiserAdvisor is an independent service matching you with 2 to 3 vetted advisers. Its form asks for your ZIP code and answers to a few questions; a match is not guaranteed.
Free to request, with no obligation to hire. By submitting, you consent to calls, texts and emails from WiserAdvisor and up to three advisers. Advisers pay for introductions.
Clear Money Guide may earn a referral payment for a qualifying completed form. An introduction is not a Clear Money Guide recommendation.
Opens on WiserAdvisor’s site in a new tab.
Explore advisor help with tax planning
Considering financial advice? Request an adviser introduction with no obligation to hire.
The form is run by Kapitalwise, our advisor-matching partner. Requesting an introduction is free. Submitting the form shares your contact details with advisers, so expect calls and texts. Advisers pay for introductions. Clear Money Guide may earn a referral payment for a qualifying submitted form, whether or not you hire anyone. A match is not guaranteed.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
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 29, 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.