The deduction’s previous cap of $10K jumps to $2.5M.
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Quick Tax Tip
With Art Werner
CPE Today
If you thought Section 179 was already generous, buckle up. Tax guru Art Werner is back with a Quick Tax Tip that dives into one of the most business-friendly changes proposed in the “Big, Beautiful Bill” — a massive, permanent expansion of the Section 179 expensing limit to $2.5 million.
That’s right. The deduction, which once topped out at a modest $10,000 (yes, really), could soon allow businesses to expense up to $2.5 million of qualifying property immediately. According to Werner, this is not just another routine adjustment — this is a seismic change in year-one expensing power.
And for the right business? It could be a game-changer.
Section 179 has been part of the tax code since the 1950s, but it didn’t always pack this much punch. Werner recalls when the deduction sat at just $10,000, barely enough to cover a modest equipment upgrade. Over the years, Congress boosted it repeatedly:
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The PATH Act of 2015 permanently set the deduction at $500,000 and added cost-of-living adjustments (COLA).
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The Tax Cuts and Jobs Act (TCJA) increased it to $1 million in 2018, with ongoing inflation indexing.
Now the new bill offers a staggering $2,500,000 limit, along with a $4 million investment cap — meaning businesses investing more than that start to phase out the deduction dollar-for-dollar.
“This is a significant increase,” Werner emphasizes, “and it’s permanent — meaning it would take an act of Congress to undo it.”
For small and mid-sized businesses, Section 179 is one of the most powerful tax-planning tools in the arsenal. Unlike bonus depreciation, Section 179 allows taxpayers to choose what to expense and when to expense it.
The proposed $2.5 million cap means:
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Businesses can fully expense large equipment purchases, technology investments, vehicles, machinery, and certain improvements.
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Firms with heavy capital-expenditure needs (manufacturing, construction, logistics, medical practices, agriculture, and more) can dramatically reduce taxable income in the purchase year.
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Taxpayers have more control than bonus depreciation offers, including the ability to target expensing toward assets that provide the most strategic benefit.
A permanent $2.5 million Section 179 limit? That’s rocket fuel for many businesses.
Werner points out that this isn’t a one-size-fits-all deduction. Firms nearing or exceeding the $4 million investment limit may need more nuanced planning, since the deduction phases out quickly.
But for the vast majority of closely held businesses, this expansion is a rare gift:
- Equipment-heavy businesses get instant payoff on major purchases.
- Growing firms can accelerate tech adoption and modernization.
- Family-owned businesses gain flexibility in transition planning.
- Professional practices—dental, medical, architecture, engineering—can expense high-dollar equipment.
And unlike many provisions in recent tax packages, this one is permanent — offering long-term planning stability.