QUESTION:
What is Section 179 Expensing?
ANSWER:
Section 179 allows you to take an immediate expense deduction for purchases of depreciable business equipment rather than capitalizing and depreciating the asset over time. OBBBA expanded expensing to allow $2,560,000 in immediate deductions, with a phaseout threshold beginning at $4,090,000 for property placed in service in 2026. These thresholds will be indexed for inflation starting after 2026. Section 179 applies to many of the same assets as bonus depreciation, but it also includes property that bonus depreciation doesn’t cover, such as HVAC, fire protection, and alarm systems, off-the-shelf software, and furniture used in lodging facilities.