Glossary · Tax & Accounting
Section 179.
IRS provision allowing immediate expense deduction of up to $1.16M (2026) on qualifying business assets in the year placed in service.
What it is
Section 179 is the IRS Internal Revenue Code provision that lets businesses immediately expense — rather than depreciate over multiple years — the cost of qualifying business assets in the year they're placed in service. The 2026 deduction limit is $1,160,000, with a phase-out beginning at $2,890,000 of total Section 179 spending. Qualifying assets are tangible personal property used in business: trucks, trailers, equipment, machinery, computers, off-the-shelf software.
Commercial trucks are eligible. The election is made on IRS Form 4562. The single biggest restriction: Section 179 cannot create a net tax loss — the deduction is limited to business income, with any excess carried forward. Bonus depreciation (a separate but stackable acceleration) can layer on top of Section 179 for additional Year-1 deduction; bonus depreciation is at 60% in 2026 and phasing down on a published schedule.
Why it matters for trucking finance
For owner-operators buying a truck, Section 179 lets them expense the entire purchase price in Year 1 instead of spreading depreciation over 3 years. On a $130K truck, that's $130K of taxable-income reduction immediately — potentially $30–40K in federal taxes saved for owner-ops in higher brackets. Combined with bonus depreciation, the Year-1 deduction can be even larger. The catch: Section 179 cannot create a net loss, so operators with modest revenue must use MACRS instead. Consult a CPA familiar with trucking tax before electing — the wrong election in the wrong year can leave money on the table.
Related terms
- MACRS Depreciation (MACRS) — Modified Accelerated Cost Recovery System — IRS depreciation method for business assets; semi trucks depreciate over 3 years on a 200% declining balance.
- Schedule C — IRS Form 1040 Schedule C — Profit or Loss from Business; used by sole-proprietor owner-operators to report business revenue, expenses, and net profit.
- Equipment Loan — Term loan secured by the financed vehicle (truck, trailer, or other equipment); standard structure for buying Class 8 tractors and trailers.
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