Section 179 Deduction

Deduct the FULL cost of equipment in the year you buy it instead of depreciating over multiple years.

Tax Form

Form 4562, Part I

Estimated Savings

$1,000-100,000/year

IRS Reference

Publication 946

Income Level

Growing ($25k-$100k)Established ($100k+)

How It Works

Section 179 allows you to deduct the full purchase price of qualifying equipment and software in the year you buy it, rather than depreciating it over several years. For 2025, the maximum deduction is $2,500,000 (doubled from previous years). This is incredibly valuable for creators making significant equipment purchases - you get the full tax benefit immediately.

IRS Rules & Requirements

2025 maximum deduction: $2,500,000 (increased from $1,220,000)
Phase-out begins when total property placed in service exceeds $4,000,000
Equipment must be used more than 50% for business
Cannot create a business loss (limited to taxable business income)
Must elect Section 179 on originally filed return (including extensions)

Real Examples

Buy $10,000 camera setup: Deduct full $10,000 in year 1 instead of over 5 years

Purchase $5,000 computer for editing: Full $5,000 deduction immediately

Upgrade entire studio for $25,000: Deduct all $25,000 in purchase year

Common Mistakes to Avoid

Not electing Section 179 and defaulting to slow depreciation
Trying to use Section 179 to create a business loss (not allowed)
Missing the election on original return (hard to claim later)
Not tracking business use percentage for listed property

Pro Tip

Section 179 is especially powerful in high-income years. If you have a great year, consider making equipment purchases before year-end to offset that income with immediate deductions.

Related Deductions

📉

Depreciation (MACRS)

Spread equipment costs over multiple years using IRS depreciation schedules for steady annual deductions.

📷

Camera Equipment

Deduct cameras, lenses, and video equipment used for content creation.

💻

Computer & Laptop

Computers, laptops, and peripherals used for content creation and editing.

Not sure if you qualify?

Our team reviews your specific situation and finds every deduction you're eligible for. Get a free tax review today.

Get Your Free Tax Review