What is Section 179 Deduction?
Definition Section 179 lets a business deduct the full cost of qualifying equipment, machinery, and certain software in the year it is placed in service rather than depreciating it over time. There is an annual dollar limit that phases out once purchases exceed a threshold, and the deduction cannot exceed the business's taxable income. Unused amounts can carry forward.
It accelerates deductions to reduce tax in a profitable year, making equipment-purchase timing a practical planning conversation for business clients.