Auto & Equipment Finance Calculator

The financing structure decision most calculators skip

Section 179 and bonus depreciation only apply if your business is treated as the owner of the equipment for tax purposes — and that depends entirely on how the financing is structured, not just whether you're "financing" versus "buying outright." A conventional equipment loan, or a lease structured with a $1 buyout at the end, is generally treated as a purchase — you own the asset, and you can claim Section 179. A true fair market value (FMV) lease works differently: you're renting the equipment with an option to buy it later at its market value, and the lessor — not you — typically retains ownership for tax purposes, which usually means no Section 179 deduction is available to you at all.

The 2026 numbers

The One Big Beautiful Bill Act (OBBBA) substantially increased Section 179 limits and reinstated full bonus depreciation. For 2026, businesses can deduct up to $2,560,000 in qualifying equipment purchases under Section 179, with the deduction beginning to phase out once total qualifying purchases exceed $4,090,000 for the year. Any remaining basis beyond the Section 179 amount can generally be deducted using 100% bonus depreciation — a full reinstatement after bonus depreciation had been declining in prior years (60% in 2024, 40% in the original 2025 schedule before OBBBA changed it).

Vehicles have their own, more complex rules

Vehicle weight class genuinely changes the outcome — a heavy work truck and a passenger sedan of similar cost can produce dramatically different first-year deductions. Check your specific vehicle's GVWR (gross vehicle weight rating) before assuming a particular deduction amount.

What you need to do to actually claim it

• Place the equipment in service by December 31, 2026 — purchased but not yet in active business use doesn't qualify for the current tax year.
• Document business-use percentage, especially for vehicles and equipment with any potential personal use — mileage logs and usage records matter if the deduction is ever reviewed.
• Confirm your state's conformity — not every state follows federal bonus depreciation rules exactly, so state tax savings may differ from the federal estimate above.

The 2026 Section 179 limit ($2,560,000), phase-out threshold ($4,090,000), and 100% bonus depreciation reinstatement under OBBBA verified across multiple independent 2026 sources with consistent, matching figures. The financing structure distinction (loan/$1 buyout vs. FMV lease) and vehicle weight class rules verified against equipment financing industry sources. This calculator's formula was validated against a cited worked example. This is a planning estimate, not tax advice — a CPA should confirm your specific eligibility and structure the financing accordingly before you commit.