Equipment Cost


Section 179 Deduction


Bonus Depreciation


1st Year Depreciation




TAX SAVINGS (35% Tax Bracket)


Estimated Equipment Cost


after tax savings

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Section 179 Tax savings calculator

Section 179 Tax Savings Calculator
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The Section 179 Tax Deduction allows a business to deduct all or part of the purchase price of certain qualifying equipment that is leased or financed.

  • For the 2016 tax year, Section 179 has been permanently changed to $500,000 plus an adjustment for inflation.
  • During years 2015, 2016, and 2017 businesses will be able to depreciate 50% of acquired equipment. Depreciation with be lowered to 40% in 2018 and 30% in 2019.
  • The deduction phases out when a business purchases more than $2,500,000 in one year.

The deduction limit for 2016 is $500,000. This is a large increase from other years and means a business can deduct the full cost of equipment from their 2016 taxes, up to $500,000. This can really make a difference to the bottom line at the end of the year.

To take advantage of Section 179 limits for 2016, the equipment must be purchased and put into service by midnight 12/31/2016. Use Form 4562 to claim your deduction.


This example presents a potential tax scenario based on typical assumptions that may not apply to your business. The indicated tax treatment applies only to transactions deemed to reflect a purchase of equipment of a capitalized lease purchase transaction. Please consult your tax advisor to determine the tax ramifications of acquiring equipment or software for your business.


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