2026 Section 179 Tax Deduction Overview & Limits

Section 179 of the IRS tax code allows qualifying small businesses to deduct the full purchase price of eligible equipment and vehicles during the tax year they are placed into service. For 2026, this incentive remains one of the most powerful tools available to business owners looking to invest in their operations while reducing taxable income. 

You'll find that this deduction applies to both new and used vehicles -- what matters is that the vehicle is new to your business -- and it covers vehicles that are purchased outright or leased. Of course, there's more to it than that. Here's a rundown on some of the most pertinent details you should know before claiming Section 179:¹

• 2026 Deduction Limit: $2,560,000¹
  • Good on new and used equipment (as long as new to the buyer).
  • Purchased as well as leased vehicles qualify.

• 2026 Spending Cap: $4,090,000¹
  • Defined as: The maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced on a dollar-for-dollar basis (making it a true small-business incentive).
  • Spend beyond this cap and your allowed Section 179 deduction begins to be reduced on a dollar-for-dollar basis, making it a true "small business tax incentive".
  • Deduction is completely phased out at $6,650,000.

• 2026 Bonus Depreciation: 100%¹
  • Defined as: a tax incentive that allows a business to immediately deduct a large percentage of the purchase price of eligible assets.
  • Generally taken after the Section 179 Spending Cap is reached.
  • Applies to both new and used vehicles.

• For your vehicle purchase to qualify under Section 179, it must be:
  • Purchased and put into use before Dec. 31, 2026¹
  • Used for business purposes more than 50% of the time.
  • Titled in the company's name (not the company's owner's name).

How Do I Use the Section 179 Tax Incentive?

Using the Section 179 deduction is simple. It starts with selecting a qualifying Ford vehicle that meets your business needs and falls into the appropriate weight category. Once you've identified the best new work truck, SUV or van for your needs, you'll need to complete the purchase or lease and place the vehicle into service before the end of the tax year. When you file your business taxes, you or your accountant will complete IRS Form 4562 to claim the deduction.¹

As with anything related to taxes, it's important to keep detailed records of the vehicle's business use, including mileage logs, to substantiate your claim in case of an audit. While we recommend discussing such matters with a qualified tax professional, our finance team at Coastal Bend Ford of Beeville can help you structure your next Ford purchase so that it's in compliance with Section 179 acquisition rules.¹