Section 179 and Bonus Depreciation
Allowable Section 179 (cap, phase-out, taxable-income limit), bonus depreciation, and remaining basis to MACRS.
Example
You enter
- Asset cost (USD) 50000
- Business-use percent 100
- Taxable income before the deduction (USD) 200000
- Tax year 2025
You get
- Business basis 50000
- Dollar cap 2500000
- Section 179 deduction $50000
- Bonus (%) 100
- Remaining basis (to MACRS) $0
Details, formula, and sources
Section 179 = min(business_basis, dollar_cap, taxable_income). dollar_cap = max(0, annual_cap - max(0, business_basis - phaseout_start)). bonus = (business_basis - sec179) * bonus_pct. Residual basis flows to MACRS.
IRC 179 cap and phase-out per IRS Publication 946 and the annual revenue procedures; 2025 $2,500,000 / $4,000,000 and 2026 $2,560,000 / $4,090,000 as amended by the One Big Beautiful Bill Act. Bonus depreciation per IRC 168(k), a permanent 100% for qualified property acquired after 2025-01-19 (IRS Notice 2026-11). Per-year parameters bundled in SECTION_179_LIMITS (data/accounting/section-179-limits.json).
Free at irs.gov; cap and phase-out announced in the annual Rev. Proc. (e.g., Rev. Proc. 2024-40 for 2025).
Estimate only. Tax law changes. Confirm with the current IRS publication or a licensed CPA before filing.
Field names used by the API: cost, business_use_pct, taxable_income, tax_year, business_basis, dollar_cap, section_179_deduction, bonus_pct, remaining_basis_for_macrs
- Phase-out dollar-for-dollar reduction in cap above the thresholdIRC 179(b)(2)
- Bonus rate TCJA phase-down 80% (2023) / 60% (2024), then a permanent 100% from 2025 under OBBBA for property acquired after 2025-01-19; property placed in service in the 2025-01-01 to 2025-01-19 window takes 40%IRC 168(k); IRS Notice 2026-11