Business Equipment (Section 179)

Average Value: $500 - $50,000+

Section 179 allows immediate expensing of business equipment instead of depreciating over years. For 2026, you can deduct up to $1,250,000 of equipment purchases. This includes computers, software, office furniture, vehicles (with limits), and more.

Requirements

Equipment must be used >50% for business
Must be placed in service during the tax year
Maximum deduction: $1,250,000 (2026)
Phase-out begins at $2,890,000 total purchases
Cannot create or increase a business loss

How to Claim

1List all equipment purchased during the year
2Determine business-use percentage for each item
3Choose: Section 179 immediate deduction or depreciate over time
4Complete Form 4562
5Report on Schedule C

Common Mistakes to Avoid

✗Using Section 179 in a loss year (can't create a loss)
✗Forgetting to prorate for partial-year or partial-business use
✗Missing the business use percentage documentation
✗Not considering depreciation for lower income years

How AlphaTax Helps

AlphaTax tracks your equipment purchases, calculates Section 179 vs depreciation benefits, and recommends the optimal strategy based on your income level.

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Related AlphaTax Features

Deduction Tracker

AI-Powered Expense Categorization

Frequently Asked Questions

Should I always use Section 179?

Not always. If you expect higher income next year, depreciating may provide more value. AlphaTax models both scenarios.

Can I deduct my laptop?

Yes, 100% if used exclusively for business. If mixed use, calculate business percentage and apply to the cost.