Although the Section 179 Deduction might seem redundant since the advent of Special Depreciation, the Section 179 Deduction can serve as an important tax planning tool despite its limitations.

This video tells you what the Section 179 Deduction is, how it works, and how it can effect your present and future taxable income.

2023 UPDATE: The maximum Section 179 Deduction for 2023 is $1,160,000. The Deduction starts to phase out as described in the video at $2,890,000 of asset purchases, and completely phases out at $4,050,000.

Introduction: 0:00
What is the Section 179 Deduction? 0:45
How does the Deduction Work? 2:05
The Section 179 Deduction as a Tax Planning Tool: 3:38
Reporting the Deduction on From 4562: 5:18
Review and Conclusion: 6:25

To learn more about MACRS Depreciation, click here:    • Depreciation 101:  What is MACRS?  

To learn more about Special Depreciation, click here:    • Depreciation 101: Special Depreciatio...  

Additional Information and Resources:

IRS Publication 946: "How to Depreciate Property": https://www.irs.gov/pub/irspdf/p946.pdf

IRS Form 4562: "Depreciation and Amortization": https://www.irs.gov/pub/irspdf/f4562...

Congressional Research Service: The Section 179 and Section 168 (k) expensing Allowances: Current Law and Economic Effects: https://sgp.fas.org/crs/misc/RL31852.pdf

The Tax Geek on The Site Formerly Known as Twitter: @taxgeekusa

The Tax Geek on Reddit: www.reddit.com/r/askataxgeek

Image Sources:

The image of "Frank" was generated by thispersondoesnotexist.com and any resemblance between this image and any person, living or deal, is coincidental and not intentional.

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Kenneth C. Zirkel

NOTE: Any 2022 tax forms represented in this video have yet to be released by the IRS, and may differ from the forms that will ultimately be released. The 2022 tax forms as depicted are expected to be very similar to their 2021 counterparts.

Intro Music: "Bluesy Vibes" Doug Maxwell YouTube Audio Library

Outro Music: "Modern Attempt" Track Tribe via YouTube Audio Library

DISCLAIMER: This video is for educational and informational purposes only. It is not intended to render tax advice or investment advice for individual situations. If you have questions regarding your particular situation, please consult with a qualified tax or investment professional.

The information in this video is current as of date of publication, and is subject to changes.