Question: A sole proprietor, Jennifer, purchased a laptop for her company for $2,500 in December 2024 but did not place it in service until January 2025. She also purchased office furniture for her company for $3,200 in January 2025 and placed it in service in February 2025. She would like to deduct the full cost of both items on her 2025 return. Can she elect §179 for both purchases?
Answer: Yes. Jennifer can elect to take the §179 deduction for both purchases on her 2025 return, Form 1040, Schedule C, Profit or Loss From Business, Line 13, Depreciation and Section 179 expense deduction.
Placed in service rule:
For §179 expense, the deduction is available in the year the property is placed in service, not the year it is purchased per Reg. §1.179-4(a).
- The laptop was bought in December 2024 but was not placed in service until January 2025.
- The office furniture was both purchased and placed in service in 2025.
Qualified property:
Both items meet the §179 qualified property requirements:
- Tangible personal property used in a trade or business
- New or used property is eligible (as long as it’s new to Jennifer)
Election process:
Jennifer can elect §179 for both items on her 2025 tax return by:
- Filing Form 4562, Depreciation and Amortization (Including Information on Listed Property) with the 2025 return
- Listing both items in Part I and electing the cost to expense
Dollar limits:
Based on the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, the §179 deduction limitation for 2025 is $2.5 million, and the phaseout begins dollar for dollar at $4 million. The §179 expense deduction is eliminated at $6.5 million.
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Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing.