Does Section 179 Allow Choosing How Much to Deduct Each Year?

Someone on Reddit has a small business that buys assets with a short lifespan (about 3 years) that are mostly under $2,500. Seven-year depreciation does not fit their situation. They asked whether Section 179 allows choosing the amount to deduct in a given year, for example: buy a $1,000 asset in 2025 and deduct $500 in 2025 and $500 in 2026. No. Under Section 179, you cannot choose to deduct part of an asset's cost in one year and the rest in another. You must either deduct the full qualifying amount in the year you place the asset in service or depreciate it over its useful life. For assets under $2,500 that qualify, you can often expense the entire cost in the purchase year.

Bottom line: Under Section 179, you cannot choose to deduct part of an asset's cost over multiple years. You must either deduct the full qualifying amount in the year you place it in service or depreciate it over its useful life. For assets costing less than $2,500, you can often expense the entire amount in the year of purchase if you qualify, but partial deductions are not permitted under IRS rules.

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Question from Reddit

I have a small business and purchase assets that typically have a 3 year lifespan before replacing and mostly under $2,500. The 7 year depreciation does not make sense for my business. Does section 179 allow for choosing the amount I'd like to deduct?

For example

If I purchase an asset for $1000 in 2025

Can I choose to deduct $500 for 2025 and deduct the remaining $500 for 2026?

Source: Reddit

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Analysis

The question is about the Section 179 deduction and whether it allows partial deductions of assets that typically have a short lifespan and are priced under $2,500. It fits within small business tax deductions for managing asset-related expenses.

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Answer

Under Section 179, you cannot choose to deduct part of an asset's cost over multiple years. If you purchase an asset, you must either:

• Deduct the full qualifying amount in the year you place it in service, or
• Depreciate it over its useful life.

For assets costing less than $2,500, you can often expense the entire amount in the year of purchase if you qualify, but partial deductions are not permitted (per IRS rules).

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Applicable Sections

Federal / IRS

• Section 179 allows immediate expensing of qualifying business assets up to certain limits. For assets under $2,500, businesses usually can fully deduct the cost in the purchase year (IRS Publication 946).

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Practical Notes

• For assets that qualify under Section 179 and are priced under the established limit, like your $1,000 asset, you could claim the entire $1,000 deduction in the purchase year, provided you meet the requirements.
• Keep track of the asset's placed-in-service date to ensure proper timing of your deduction.
• Check for any updates to the limits and rules that may be in effect for the tax year you're filing.

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Limitations

This answer does not cover specific state tax implications or additional complexities that might arise in unique business situations. For limits, eligibility, and timing for your assets, consult a tax professional. Margen can help you model the impact of expensing vs depreciation for your business.