Section 179 & Bonus Depreciation Tax Savings Calculator for 2026
Estimate Section 179 and 100% bonus depreciation tax savings on business equipment purchases using verified 2026 IRS limits.
How Section 179 & Bonus Depreciation Tax Savings Are Calculated
The calculator first elects Section 179 expensing up to the 2026 IRS limit (reduced by any spending-cap phase-out and, optionally, your taxable income), then applies 100% bonus depreciation to whatever qualifying basis remains, and finally multiplies the combined first-year deduction by your marginal tax rate.
Figures reflect IRS Rev. Proc. 2025-32 (2026 inflation-adjusted amounts) and the permanent 100% bonus depreciation rate for qualified property acquired after January 19, 2025, restored by the One, Big, Beautiful Bill Act (OBBBA, P.L. 119-21). Section 179 can never exceed taxable income from the active conduct of a trade or business — any excess carries forward to future years — while bonus depreciation has no dollar cap or income limitation and can create or increase a net operating loss. Because 2026 bonus depreciation is 100%, any basis not expensed under Section 179 is still fully written off in year one, so 'remaining basis depreciated normally' is typically $0. This tool does not model the separate $32,000 heavy-SUV cap, listed-property rules, state conformity, or depreciation recapture.
How to Use the Section 179 & Bonus Depreciation Tax Savings Calculator
Enter your total qualifying equipment cost
Use the total cost of new or used business equipment, machinery, software, or qualifying property placed in service during the 2026 tax year.
Choose whether to elect Section 179
Leave this on to expense as much as possible under the 2026 Section 179 limit before the remainder falls to bonus depreciation, or turn it off to rely on bonus depreciation alone.
Toggle the taxable income limit if it applies
Section 179 cannot exceed your business's taxable income from its active trade or business before the deduction; enable this toggle and enter that income if it's lower than your equipment cost.
Enter your marginal tax rate
Use your business's federal marginal tax rate — 21% flat for a C-corp, or your individual marginal bracket for a pass-through entity such as an S-corp, partnership, or sole proprietorship.
Review your deduction and tax savings
See the Section 179 amount elected, the bonus depreciation deduction, the combined first-year write-off, and the estimated dollar tax savings.
Real-World Scenario Example
"A construction company buys $3,000,000 of qualifying equipment in 2026, elects Section 179, does not apply the taxable income limit, and has a 25% marginal tax rate."
Inputs
Result
Section 179 covers $2,560,000 (the full 2026 limit, since $3M is below the $4,090,000 phase-out threshold), 100% bonus depreciation covers the remaining $440,000, for a $3,000,000 total first-year deduction and about $750,000 in estimated tax savings.
Important Disclaimer
This calculator provides a simplified educational estimate of potential Section 179 and bonus depreciation tax savings based on IRS Rev. Proc. 2025-32 and OBBBA bonus depreciation rules for tax year 2026. It is not tax advice and does not account for state tax conformity, alternative minimum tax, listed-property limits, depreciation recapture, or your complete tax situation. Consult a CPA or licensed tax professional before making equipment purchase or depreciation elections.
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Sources & References
IRS Rev. Proc. 2025-32 — 2026 Inflation-Adjusted Items (Section 179 Limits)
https://www.irs.gov/pub/irs-drop/rp-25-32.pdf
IRS Newsroom — Treasury, IRS Issue Guidance on the Additional First Year Depreciation Deduction (OBBBA Bonus Depreciation)
https://www.irs.gov/newsroom/treasury-irs-issue-guidance-on-the-additional-first-year-depreciation-deduction-amended-as-part-of-the-one-big-beautiful-bill