Remember the 2025 Small Business Instant Depreciation Tax Break

“Nerdwallet” by Andy Rosen

“Key takeaways

• “Section 179 of the Internal Revenue Code lets businesses write off assets immediately rather than after they’ve depreciated.

• Office furniture, certain vehicles, computers and off-the-shelf software are typically considered deductible expenses.

• For 2025 (taxes filed in 2026), the maximum Section 179 deduction is $1,250,000.“

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What is the Section 179 deduction?

“Section 179 deductions are major purchases that can be used to lower a business’s taxable income in the year the purchased items are put into service. Items that fall under Section 179 may be deductible at full value rather than depreciated.

For example, if you buy a new piece of machinery for your factory and begin using it right away, you may be able to deduct the entire cost from your business’s taxable income when you file taxes the next year. This is true even though the purchase will continue to have value to you in future years.

How the Section 179 tax deduction works

Office furniture, computers and off-the-shelf software are among the business

equipment covered by Section 179

It doesn’t generally cover real estate. While some vehicles, such as cargo vans, are eligible Section 179 expenses, the federal government has narrowed businesses’ ability to write off vehicles traditionally used for personal transportation. 

Another thing to remember when considering business costs for tax purposes is that many expenses are immediately deductible, regardless of whether they qualify for Section 179. These include rent, office supplies, insurance and some startup costs. In contrast,

Section 179 mostly deals with assets that will retain value after you begin using them and would otherwise be written off gradually during the course of their time in service.”

More:

Section 179 Deduction: Limits, How It Works in 2025