What is the maximum amount that can be expensed under the 179 Expense Deduction?

The maximum amount that can be expensed under the Section 179 Expense Deduction is indeed up to $500,000. This deduction allows businesses to deduct the full purchase price of qualifying equipment and software purchased or financed during the tax year, effectively encouraging them to invest in their business.

The $500,000 limit applies to the amount that can be immediately expensed rather than depreciated over a set period. However, this limit is subject to a phase-out threshold; if a business purchases more than a certain amount of qualifying equipment during the tax year, the maximum deduction can be reduced. The dollar limit and the phase-out range can change from year to year, but a significant increase in the limit, to $500,000, was established to help stimulate business investment and growth.

Understanding this deduction is crucial for tax planning, as it can significantly reduce a business's taxable income, allowing for reinvestment in the business or other expenses.