Big Boost for Business: Sec. 179 Expensing Limit Jumps to $2.5 Million Under OBBBA!

If you own a business, the Sec. 179 expensing election allows you to deduct the cost of purchasing eligible assets rather than depreciating them over multiple years. An annual expensing limit applies, which begins to phase out dollar-for-dollar when acquisitions for the year exceed the phaseout threshold. For qualifying property placed in service in 2025, the One Big Beautiful Bill Act (OBBBA) doubles the expensing limit to $2.5 million. The 2025 phaseout threshold is $4 million, up from $3.13 million before the OBBBA. In 2026, after inflation adjustments, the expensing limit increases to $2.56 million and the break begins to phase out when acquisitions for the year exceed $4.09 million.