Bonus Depreciation Calculator
Compare first-year deductions under 100% bonus depreciation, Section 179 expensing, and regular MACRS for an equipment or asset purchase, and see the tax value of each.
A bonus depreciation calculator compares the first-year deduction available under IRC Section 168(k) bonus depreciation, Section 179 expensing, and standard MACRS for a given asset purchase. Under the One Big Beautiful Bill Act, bonus depreciation is 100% and permanent for qualifying property acquired after January 19, 2025, so both bonus and Section 179 generally produce a full first-year deduction, and the choice turns on loss creation, state conformity, and property type.
Run the Numbers
Estimated Result
Section 179 is capped (approximately $2.56 million for 2026, with a phase-out beginning around $4.09 million of purchases) and cannot create or increase a loss. Bonus depreciation is uncapped and can. Passenger automobiles are separately limited by the Section 280F luxury auto caps, which this calculator does not apply. Many states decouple from federal bonus depreciation and require an addback, so confirm your state treatment before relying on the federal result.
Frequently Asked Questions
Is bonus depreciation still 100% in 2026?
Yes. The One Big Beautiful Bill Act restored the 100% rate on a permanent basis for qualifying property acquired after January 19, 2025, removing the phase-down that would have cut it to 20% in 2026 and zero in 2027.
Should I use Section 179 or bonus depreciation?
Use bonus depreciation when you need the deduction to create a loss, since Section 179 cannot. Use Section 179 for roofs, HVAC, fire protection, and security systems on nonresidential buildings, which bonus cannot reach, and in states that decouple from bonus depreciation.
Does this calculator handle vehicles?
Not the luxury auto limits. Passenger automobiles are capped under Section 280F regardless of method. Vehicles above 6,000 pounds gross vehicle weight rating fall outside that definition and have separate rules, and business use must exceed 50% for accelerated methods.
What is the mid-quarter convention?
If more than 40% of the total basis of personal property placed in service during the year falls in the fourth quarter, the mid-quarter convention replaces the half-year convention for every asset placed in service that year, reducing first-year MACRS deductions. This calculator assumes the half-year convention.
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