Section 01 of 06
Three instant write-off mechanisms — three different rules
Mechanism | 2026 Limit | Activation method |
Section 179 | Up to USD 2,560,000; phase-out begins at USD 4,090,000 | Must be actively elected on the return |
100% Bonus Depreciation | No dollar cap for qualifying property | Applies automatically to eligible property placed in service after January 19th of 2025 |
De Minimis Safe Harbor | USD 2,500 per item without AFS; USD 5,000 with one | No depreciation schedule required below threshold |
Section 02 of 06
Section 179 — the elected write-off
It lets a business deduct the full cost of qualifying equipment or property in the year it is placed in service. The election must be actively chosen on the return — it does not apply automatically.
Rule | 2026 Figure |
Maximum deduction | USD 2,560,000 |
Phase-out begins | USD 4,090,000 in total qualifying purchases |
Phase-out structure | Dollar-for-dollar above the threshold |
Income limitation | Deduction cannot exceed net business income for the year |
Excess treatment | Carries forward to the following tax year — not lost |
Section 03 of 06
100% bonus depreciation — now permanent
The One Big Beautiful Bill Act (OBBBA) permanently restored 100% bonus depreciation for qualifying property acquired and placed in service after January 19th of 2025 — IRS Notice 2026-11. There is no dollar cap. This makes it the stronger option in a low-income or loss year, since it is not subject to the same net income limitation as the IRC § 179 election.
Property must satisfy specific eligibility requirements. Not every asset qualifies. Listed property, covering specific vehicles and mixed-use assets, carries additional documentation requirements to claim bonus depreciation at all.
Who is writing this
Guidance from a firm that files these every season
Wasserman Accounting has advised New Jersey individuals and businesses since 1993. The positions in this article are the ones we take on real returns.
Since 1993
30+ years in practice
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Clients served
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Section 04 of 06
De Minimis Safe Harbor — the overlooked option
It allows immediate expensing of items below a set per-item threshold without a depreciation schedule or formal election. The 2026 limits are USD 2,500 per invoice or item without an Applicable Financial Statement, and USD 5,000 with one. Software subscriptions and small tools as well as office equipment frequently fall under this threshold and can be expensed directly.
Section 05 of 06
Example
Imagine a freelance video editor buys a USD 2,200 hard drive array and a USD 6,500 editing workstation in February 2026.
The hard drive array falls below the USD 2,500 de minimis threshold — it is expensed immediately with no election and no depreciation schedule. The workstation exceeds the threshold, so she evaluates Section 179 vs bonus depreciation in line with her projected net income for the year.
Asset | Cost | Path Used | Reason |
Hard drive array | USD 2,200 | De minimis safe harbor | Below USD 2,500 threshold |
Editing workstation | USD 6,500 | Section 179 or Bonus Dep. | Requires election or eligibility analysis |
If her net business income for 2026 is USD 4,000, the IRC § 179 election is capped at that amount — the remaining USD 2,500 carries forward. Bonus depreciation has no such cap. The correct path depends on her full return picture — not just the asset cost.
Section 06 of 06
What you should do next
Which mechanism produces the best outcome for your business depends on asset type, income level, entity structure, and other elections already in place — for a full breakdown of small business tax deductions 2026, covering depreciation rules and entity-specific guidance — review the complete CPA guide at Wasserman Accounting or schedule a consultation before you file.
