The One Big Beautiful Bill Act made 100% bonus depreciation permanent and raised the Section 179 limit to $2,560,000 for 2026, so for most equipment buyers the question is no longer whether you can write it all off in year one — it usually is. The real decision is how: how much goes through Section 179 versus bonus depreciation, and how the business-income limit and the carryforward interact. This calculator models that ordering the way the majors and lender lead-gen widgets don't.

Section 179 and bonus depreciation aren't the same thing

Both let you deduct equipment cost in year one, but they behave differently in two ways that matter. Section 179 is capped and income-limited: for 2026 it's limited to $2,560,000, it phases out dollar-for-dollar once your purchases exceed $4,090,000, and it can never reduce your business income below zero. If you elect more than your income allows, the excess carries forward.

Bonus depreciation is neither capped nor income-limited. At 100% for 2026 it applies to whatever basis is left after Section 179, and it can push your business into a taxable loss. That single difference — bonus can create a loss, Section 179 cannot — is the hinge the whole strategy turns on.

Why the ordering matters: the income limit and the carryforward

Say you buy $400,000 of equipment and your business income is $250,000. If you elect the full $400,000 to Section 179 first, only $250,000 is deductible this year and $150,000 becomes a carryforward — deferred, not lost, but not helping you now. If instead you take $250,000 of Section 179 and let bonus depreciation absorb the other $150,000, you deduct the whole $400,000 this year with no carryforward.

That's what the Optimize strategy does: it takes only the Section 179 you can actually use, then lets bonus cover the rest. It matches the best current-year result of "bonus first" while keeping the largest share in Section 179 — which matters because many states conform to Section 179 but not to bonus depreciation.

Vehicles, phase-outs, and the state-conformity trap

Vehicles are the biggest exception. A heavy SUV (6,001–14,000 lb GVWR) caps Section 179 at $32,000 for 2026, though bonus depreciation can still cover the balance. A passenger auto under 6,000 lb runs into the §280F luxury-auto limit, which caps the entire first-year write-off at about $20,300 with bonus. Any asset used 50% or less for business drops out of Section 179 entirely.

Finally, watch state conformity. A number of states cap Section 179 far below the federal limit or decouple from bonus depreciation completely, so your state deduction may be much smaller than the federal number this tool shows. Treat the result as a federal estimate and confirm your state's rules — and your specific facts — with a CPA before filing.