Section 179 or bonus depreciation — which should I use first?

Section 179 is applied first, then bonus depreciation on whatever cost is left. In practice they work as a team: I use Section 179 to dial the deduction precisely to your business income (it cannot create a loss), and bonus depreciation — which has no dollar cap and can create a loss — to mop up the rest. With 100% bonus depreciation restored for equipment acquired after January 19, 2025, almost any equipment purchase can be fully expensed in year one using both together.

Can I take Section 179 on a used truck or used equipment?

Yes. Section 179 applies to new and used property equally, as long as the equipment is new to your business and not bought from a related party. A used skid steer, a secondhand work truck, or a refurbished machine all qualify. It just has to be used more than 50% for business and placed in service (ready to use) by year-end.

Does Section 179 work if my business had a loss?

Not by itself. Section 179 is limited to your taxable business income — it cannot create or deepen a loss. If you bought more equipment than the business earned, the excess carries forward to a future year, or you can apply bonus depreciation to it instead. Bonus depreciation has no business-income limit and can create a loss, which is why I often pair the two.

How much can I deduct under Section 179 for 2025 and 2026?

For tax year 2025 the maximum Section 179 deduction is $2,500,000, with the cap starting to phase out once you place more than $4,000,000 of equipment in service. For 2026 those figures rise to $2,560,000 and $4,090,000. Heavy SUVs over 6,000 lbs GVWR have a separate cap of $31,300 for 2025 ($32,000 for 2026). These limits are inflation-adjusted annually.

Does Florida conform to the Section 179 deduction?

For individuals, Florida has no personal income tax, so Section 179 is a purely federal calculation for sole proprietors, partnerships, single-member LLCs, and S-Corp owners reporting on their personal returns. Florida does impose a corporate income tax and decouples from some federal depreciation rules (notably bonus depreciation), so a C-Corp filing a Florida corporate return needs the federal deduction reconciled with the state treatment rather than assumed.

Section 179 Deduction: A Florida Business Owner's Guide

Section 179 Deduction: A Florida Business Owner's GuideBy Timothy LeGendre, CPA · Florida License #AC62625 · Last reviewed 2026-07-02A Florida CPA's guide to the Section 179 deduction — how it works, the vehicle and business-income limits, and Section 179 vs bonus depreciation.Section 179 lets an equipment-heavy Florida business write off the full cost of qualifying equipment in the year it is placed in service, instead of depreciating it over years. As of tax year 2025 the maximum deduction is $2,500,000 (rising to $2,560,000 in 2026), with the cap phasing out once purchases exceed $4,000,000 ($4,090,000 in 2026). Qualifying property includes machinery, equipment, off-the-shelf software, and certain building improvements, new or used. Three rules decide eligibility: the equipment must be placed in service (ready to use) by year-end, used more than 50% for business, and the deduction cannot exceed the business's taxable income — it cannot create a loss. Bonus depreciation is the companion: the 2025 tax law restored 100% bonus permanently for property acquired after January 19, 2025, and unlike Section 179 it has no income limit and can create a loss, so the two are applied together — Section 179 first, bonus on the rest. Vehicles turn on the 6,000-lb GVWR line: vehicles at or under 6,000 lbs are capped near $20,200 of first-year depreciation, while heavy SUVs over 6,000 lbs get a $31,300 Section 179 cap (2025) plus bonus on the balance, and work trucks can be fully expensed. Florida has no personal income tax, so for sole proprietors and pass-through owners this is a federal-only deduction that also reduces self-employment tax.

Frequently asked questions

Section 179 or bonus depreciation — which should I use first?: Section 179 is applied first, then bonus depreciation on whatever cost is left. In practice they work as a team: I use Section 179 to dial the deduction precisely to your business income (it cannot create a loss), and bonus depreciation — which has no dollar cap and can create a loss — to mop up the rest. With 100% bonus depreciation restored for equipment acquired after January 19, 2025, almost any equipment purchase can be fully expensed in year one using both together.
Can I take Section 179 on a used truck or used equipment?: Yes. Section 179 applies to new and used property equally, as long as the equipment is new to your business and not bought from a related party. A used skid steer, a secondhand work truck, or a refurbished machine all qualify. It just has to be used more than 50% for business and placed in service (ready to use) by year-end.
Does Section 179 work if my business had a loss?: Not by itself. Section 179 is limited to your taxable business income — it cannot create or deepen a loss. If you bought more equipment than the business earned, the excess carries forward to a future year, or you can apply bonus depreciation to it instead. Bonus depreciation has no business-income limit and can create a loss, which is why I often pair the two.
How much can I deduct under Section 179 for 2025 and 2026?: For tax year 2025 the maximum Section 179 deduction is $2,500,000, with the cap starting to phase out once you place more than $4,000,000 of equipment in service. For 2026 those figures rise to $2,560,000 and $4,090,000. Heavy SUVs over 6,000 lbs GVWR have a separate cap of $31,300 for 2025 ($32,000 for 2026). These limits are inflation-adjusted annually.
Does Florida conform to the Section 179 deduction?: For individuals, Florida has no personal income tax, so Section 179 is a purely federal calculation for sole proprietors, partnerships, single-member LLCs, and S-Corp owners reporting on their personal returns. Florida does impose a corporate income tax and decouples from some federal depreciation rules (notably bonus depreciation), so a C-Corp filing a Florida corporate return needs the federal deduction reconciled with the state treatment rather than assumed.