2024 Section 179 Deduction Limit
For 2024, the Section 179 Deduction Limit figures are $1,220,000 (Maximum section 179 expensing deduction) and $3,050,000 (Phase-out threshold: cost of section 179 property placed in service).
Effective 2024-01-01Source: Rev. Proc. 2023-34 (IRS)Verified 2026-09-02
Compared with 2023
| Item | 2023 | 2024 | Change |
|---|---|---|---|
| Maximum section 179 expensing deduction | $1,160,000 | $1,220,000 | +$60,000 (+5.2%) |
| Phase-out threshold: cost of section 179 property placed in service | $2,890,000 | $3,050,000 | +$160,000 (+5.5%) |
Who it applies to
Taxpayers who elect to expense certain depreciable assets (Section 179 property) placed in service during taxable years beginning in 2024.
What changed this year, and why
For taxable years beginning in 2024, the IRS adjusted the Section 179 expensing limits for inflation under Internal Revenue Code § 179.
Common questions
- What is the maximum Section 179 deduction for 2024?
- For 2024, the maximum Section 179 expensing deduction is $1,220,000. A taxpayer may elect to expense up to $1,220,000 of the cost of qualifying property placed in service during the year.
- How does the Section 179 phase-out work in 2024?
- The $1,220,000 deduction limit is reduced (but not below zero) by the amount by which the total cost of Section 179 property placed in service during the taxable year exceeds $3,050,000.
Every amount on this page is a published figure rather than yours. The Section 179 expensing after the phase-down takes the number you enter and works it out against them, showing which published figure it used.
What counts as section 179 property
To qualify for the section 179 deduction, property must meet four requirements: it must be eligible property, acquired for business use, acquired by purchase, and not fall into an excluded category. Eligible property includes tangible personal property such as machinery, equipment, and office furnishings; other tangible property used in manufacturing, production, or utility services (excluding buildings and their structural components); single-purpose agricultural or horticultural structures; storage facilities for distributing petroleum products; off-the-shelf computer software; and qualified section 179 real property. The treatment of property as tangible personal property for section 179 purposes is not controlled by how it is classified under local law.
To qualify for the section 179 deduction, your property must meet all the following requirements.
Publication 946 (2024), How To Depreciate Property (IRS)
How buying too much property cuts the deduction
When the total cost of section 179 property you place in service during the year exceeds the phase-out threshold, the maximum deduction you can claim is reduced dollar for dollar. For 2024, if your qualifying property costs more than $3,050,000, you must reduce the $1,220,000 dollar limit by the amount of cost over that threshold. The reduction cannot bring the limit below zero. Once costs reach $4,270,000 or more, the entire deduction is eliminated. This phase-out applies regardless of whether you file jointly or separately, though married couples filing separately must share a single reduced limit unless they elect a different allocation. The investment limitation works together with the business income limitation to determine the actual deduction you can claim in any given year.
If the cost of your qualifying section 179 property placed in service in a year is more than $3,050,000, you must gen- erally reduce the dollar limit (but not below zero) by the amount of cost over $3,050,000. If the cost of your section 179 property placed in service during 2024 is $4,270,000 or more, you cannot take a section 179 deduction.
Publication 946 (2024), How To Depreciate Property (IRS)
The deduction cannot exceed your business income
The section 179 deduction cannot exceed the taxable income you earn from actively conducting a trade or business during the year. Generally, you actively conduct a business if you meaningfully participate in its management or operations. To figure taxable income for this purpose, total the net income and losses from all trades or businesses you actively conducted, including section 1231 gains or losses, interest from working capital, and wages or salaries earned as an employee. However, you must compute this income without regard to the section 179 deduction itself, the self-employment tax deduction, any net operating loss carryback or carryforward, and any unreimbursed employee business expenses. Any portion of the deduction that exceeds your business income in the current year is not lost; it can be carried forward to future years subject to the carryover rules.
The total cost you can deduct each year after you apply the dollar limit is limited to the taxable income from the ac- tive conduct of any trade or business during the year. Generally, you are considered to actively conduct a trade or business if you meaningfully participate in the manage- ment or operations of the trade or business.
Publication 946 (2024), How To Depreciate Property (IRS)
Carrying the disallowed part forward, and which property it comes from
When you place multiple properties in service during the year and cannot deduct all of their costs because of the business income limitation, you have the flexibility to choose which properties will have their costs carried forward to future years. Your selections must be documented in your books and records. If you do not make a specific selection, the disallowed costs are allocated equally among all the properties you elected to expense for that year. For purposes of this allocation, section 179 costs allocated from a partnership or S corporation are treated as a single item of property. When carryover amounts from multiple years exist and only part can be deducted in a subsequent year, you must apply the earliest year's costs first. If property is sold or transferred before the full carryover is used, neither you nor the new owner can claim the remaining amount; it must be added back to the property's basis.
If you place more than one property in service in a year, you can select the properties for which all or a part of the costs will be carried forward. Your selections must be shown in your books and records. For this purpose, treat section 179 costs allocated from a partnership or an S corporation as one item of section 179 property. If you do not make a selection, the total carryover will be allocated equally among the properties you elected to expense for the year.
Publication 946 (2024), How To Depreciate Property (IRS)
The separate cap on heavy SUVs
For heavy sport utility vehicles and certain other vehicles placed in service during tax years beginning in 2024, there is a separate cap on the amount you can elect to expense under section 179. You cannot deduct more than $30,500 of the cost of any qualifying heavy SUV, regardless of its actual purchase price. The cap covers passenger-carrying vehicles rated above a specified minimum gross vehicle weight threshold. However, the $30,500 limit does not apply to vehicles designed to seat more than a specified number of passengers behind the driver, vehicles with a sufficiently long cargo area not readily accessible from the passenger compartment, or vehicles with an integral enclosure fully enclosing the driver compartment and load carrying device with no rear seating and no body protruding far ahead of the windshield. The heavy SUV cap works alongside the overall dollar limit and phase-out threshold; whichever is more restrictive governs the deduction for a qualifying vehicle.
You cannot elect to expense more than $30,500 of the cost of any heavy sport utility vehicle (SUV) and certain other vehicles placed in service in tax years beginning in 2024.
Publication 946 (2024), How To Depreciate Property (IRS)
Estates and trusts are shut out of this deduction entirely
Estates and trusts are not permitted to claim the section 179 deduction under any circumstances. While individuals, partnerships, corporations, and other business entities may elect to expense qualifying property, this tax benefit is completely unavailable to estates and trusts regardless of the type or cost of property placed in service. For 2024, the maximum section 179 expensing deduction is $1,220,000, subject to a phase-out when the total cost of section 179 property placed in service during the tax year exceeds $3,050,000. However, these dollar limits are irrelevant to estates and trusts because they cannot make the election in the first place. Estates and trusts that acquire qualifying property must instead recover the cost through regular depreciation deductions over the property's recovery period, rather than taking an immediate expense deduction in the year the property is placed in service.
Estates and trusts cannot elect the section 179 deduction.
Publication 946 (2024), How To Depreciate Property (IRS)
The deduction lands in the year the property is placed in service, not when you paid for it
The timing of the section 179 deduction is tied to when property is placed in service, not when payment is made. Taxpayers can elect to recover all or part of the cost of qualifying property by deducting it in the year the property is placed in service, which is the year the property is ready and available for its specific use in the business. This timing rule applies regardless of when the property was purchased or paid for. For 2024, the maximum section 179 expensing deduction is $1,220,000, subject to reduction if the total cost of section 179 property placed in service during the tax year exceeds $3,050,000. Taxpayers may choose to elect the section 179 deduction instead of recovering the cost through regular depreciation deductions over multiple years, but the election must be made for the year the property is actually placed in service, creating a clear link between the deduction and the property's operational readiness.
You can elect to recover all or part of the cost of certain qualifying property, up to a limit, by deducting it in the year you place the property in service.
Publication 946 (2024), How To Depreciate Property (IRS)
The election is made by filling out Part I of Form 4562
The election to claim the section 179 deduction is made by completing Part I of Form 4562 and attaching it to the taxpayer's federal income tax return. For property placed in service in 2024, Form 4562 must be filed with either the original 2024 tax return, whether filed timely or not, or with an amended return for 2024 filed within the time prescribed by law. If the election is made for listed property, Part V of Form 4562 must be completed before completing Part I. The election process is straightforward but must be properly documented on the correct form. For 2024, the maximum section 179 expensing deduction is $1,220,000, subject to phase-out when the cost of section 179 property placed in service exceeds $3,050,000. Taxpayers should ensure all required information is accurately reported on Form 4562 to validly elect the deduction for qualifying property placed in service during the tax year.
Election. You elect to take the section 179 deduction by completing Part I of Form 4562.
Publication 946 (2024), How To Depreciate Property (IRS)
When another deduction also caps out at taxable income, the two have to be worked out together
When a taxpayer faces two different taxable income limits, the deductions must be coordinated carefully. In addition to the business income limit that applies to the section 179 deduction, other deductions may also be subject to their own taxable income limitations. When this occurs, the taxpayer may need to calculate the limit for the other deduction while taking the section 179 deduction into account. The proper procedure is to first figure taxable income without either the section 179 deduction or the other deduction, then work through the applicable steps to determine how each limitation applies. For 2024, the maximum section 179 expensing deduction is $1,220,000, and the deduction phases out when the cost of section 179 property placed in service exceeds $3,050,000. However, even if these thresholds are met, the actual deduction claimed cannot exceed taxable income limitations, which may require coordination with other income-based deductions the taxpayer is claiming on their return.
Two different taxable income limits. In addition to the business income limit for your section 179 deduction, you may have a taxable income limit for some other deduction. You may have to figure the limit for this other deduction taking into account the section 179 deduction.
Publication 946 (2024), How To Depreciate Property (IRS)
If business use falls to 50% or less, part of the deduction comes back as income
If the percentage of business use of property for which a section 179 deduction was claimed drops to 50% or less in any year during the property's recovery period, recapture rules are triggered. In the year the business use falls to this threshold, the taxpayer must include the recapture amount as ordinary income on Part IV of Form 4797. The basis of the property is also increased by the recapture amount. This rule ensures that taxpayers who claimed an immediate expense deduction but subsequently reduce business use below the required threshold must give back part of the tax benefit. For 2024, the maximum section 179 expensing deduction is $1,220,000, subject to phase-out when the cost of section 179 property placed in service exceeds $3,050,000. However, even after claiming the full deduction, taxpayers must monitor business use percentages throughout the recovery period, as a decline to 50% or less triggers recapture and additional tax liability in that year.
You may have to recapture the section 179 deduction if, in any year during the property's recovery period, the per- centage of business use drops to 50% or less.
Publication 946 (2024), How To Depreciate Property (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Rev. Proc. 2023-34 (IRS)
- Maximum section 179 expensing deduction
Election to Expense Certain Depreciable Assets. For taxable years beginning in 2024, under § 179(b)(1), the aggregate cost of any § 179 property that a taxpayer elects to treat as an expense cannot exceed $1,220,000
- Phase-out threshold: cost of section 179 property placed in service
Under § 179(b)(2), the $1,220,000 limitation under § 179(b)(1) is reduced (but not below zero) by the amount by which the cost of § 179 property placed in service during the 2024 taxable year exceeds $3,050,000.