2025 Section 179 Deduction Calculator

Last Updated: January 2025

Planning to purchase, lease, or finance business equipment in 2025? With the Section 179 deduction limit at $1,250,000 and 40% bonus depreciation in effect, you have a powerful opportunity to significantly lower your first-year equipment costs. Our 2025 Section 179 Deduction Calculator gives you an estimate of how much you might save—and how quickly you can free up cash flow for other crucial business needs.

To quickly estimate your first-year tax savings, simply enter the total purchase amount of your qualifying equipment and your estimated federal tax bracket. The calculator will factor in Section 179, bonus depreciation (where applicable), and standard first-year depreciation to show you both your total write-off and your effective net cost. Refer to a tax professional to confirm how these numbers might apply to your specific situation.

1. Enter Your Equipment Cost   Why It Matters: This figure represents the total purchase price of equipment, qualified vehicles, and software you plan to claim under Section 179. The higher your equipment cost, the larger your potential write-off – up to the 2025 limit of $1,250,000.

2. Select Your Tax Bracket   Why It Matters: Your tax bracket impacts the effective savings you may realize from a first-year write-off. A higher bracket generally translates to more significant immediate tax savings.

3. Calculate   Click the “Show My Savings” button to see:

• Available Section 179 Deduction (2025 limit: $1,250,000)
• 40% Bonus Depreciation (if applicable)
• Normal First-Year Depreciation on any remaining basis
• Total 1st Year Deduction 
• Estimated Cash Savings (based on your tax rate)
• Effective Net Cost of the equipment after these write-offs

Note: If your anticipated Section 179 deduction exceeds your net business income, some or all of the excess may carry forward to future tax years. The calculator does not fully reflect this partial usage scenario.

• Equipment Cost: $75,000
• Potential Section 179 Deduction: $75,000 (subject to the overall $1,250,000 cap and eligibility)
• Estimated Tax Savings: $26,250 (assuming ~35% effective tax rate)
• Effective Net Cost: $48,750

This example demonstrates how Section 179 can instantly reduce your equipment costs and free up capital for other business priorities.

In-Service Date

To claim the 2025 Section 179 deduction, qualifying equipment or software must be purchased, financed, or leased and put into active business use by December 31, 2025.

Eligible Assets

Most tangible business property, certain heavy vehicles (>6,000 lb), and off-the-shelf software typically qualify. For more details, see our Section 179 Property That Qualifies page.

Net Income Limitation

Your Section 179 deduction cannot exceed your taxable business income. Excess deductions typically carry forward to future tax years, so consult a tax professional if you expect lower taxable income this year.

First-Year Write-Off

Deducting the full cost immediately (instead of depreciating over time) can provide a significant tax advantage.

Boosted Cash Flow

Reinvest in your business, rather than tying up funds in incremental depreciation schedules.

Combine With Bonus Depreciation

For 2025, bonus depreciation sits at 40%, letting you claim an extra first-year write-off on any remaining asset basis after Section 179.

Consult a Professional

Each business situation is unique. While this calculator provides a handy estimate, your actual deduction will depend on factors like your precise tax bracket, state conformity, total equipment spending, and net income limits. A qualified tax advisor can help tailor a strategy that fits your specific needs.

Regular Updates

Section 179 and bonus depreciation rules can shift with new legislation. We continuously monitor for changes and update our information accordingly—bookmark this page for the latest insights.

Accurate & Up-to-Date

We strive to reflect the most current 2025 numbers, including the $1,250,000 Section 179 cap and 40% bonus depreciation rate. Nevertheless, always verify with official IRS guidance.

Disclaimer

These calculations provide estimates for planning purposes only and do not constitute legal, financial, or tax advice. Outcomes may differ based on your overall financial situation, additional deductions, or state-specific rules.

Many businesses finance or lease equipment under arrangements that qualify for Section 179. Because you can potentially deduct the entire purchase price in the year the asset is placed in service—even if you’re paying for it over time—you keep more capital on hand for daily operations. For a deeper dive, check out our Section 179 Qualified Financing page.

For more detailed questions, visit our Section 179 FAQs.

1. Use the Calculator
   Experiment with different purchase amounts and see how your estimated savings change.
2. Time Your Purchases
   If you’re nearing year-end, consider accelerating equipment purchases to claim the deduction before December 31, 2025.
3. Seek Professional Advice
   Confirm these figures with your CPA or tax advisor, especially if you anticipate a complex scenario or multiple purchases.
4. Stay Informed
   Laws change. Keep tabs on Section179.Org for any updates on deduction limits, phaseouts, or bonus depreciation changes.

© 2025 Section179.Org – Your independent resource for maximizing Section 179 deductions.

• Disclaimer: All figures are estimates only and not a guarantee of tax savings. We are not an official IRS website.
• Tax Professional: Always consult a tax professional or the IRS directly for definitive guidance.
• IRS References: Refer to IRS Publication 946 and Instructions for Form 4562 for the most authoritative details.

Ready to Take Advantage of the 2025 Section 179 Deduction?

Use our calculator, make informed equipment purchase decisions, and enjoy the potential for significant first-year tax savings.