Section 179 Equipment Deduction Calculator

Why Section 179 matters for craft sellers

Buying a $5,000 laser engraver normally means depreciating $1,000 per year for 5 years on your tax return. Section 179 lets you deduct the full $5,000 in the purchase year instead. At a 30% marginal tax rate, that is $1,500 of tax savings in year 1 versus $300/year for 5 years. Same total, but cash in your pocket now instead of spread out.

For craft sellers who just invested in a big machine (Glowforge, commercial embroidery head, fiber laser, commercial DTF printer), Section 179 is usually the right choice. The exception is year-1 startup shops with very little income to deduct against; for those, carrying the deduction to future years can make sense.

The 50% business-use rule

Section 179 requires equipment to be used at least 50% for business. If you use your Cricut 40% for Etsy orders and 60% for personal gift projects, it does NOT qualify for Section 179. You would have to depreciate it under regular MACRS rules.

For obvious business equipment (commercial embroidery, commercial laser, DTF printer dedicated to a shop), 100% business use is typical. For dual-use items (family computer, Cricut used for both business and kid projects), track the use log carefully. The IRS can audit and disallow the deduction if you cannot substantiate the percentage.

Worked example: Glowforge Pro purchase

$7,000 Glowforge Pro for a dedicated craft business (100% business use). 2025 filing. Combined marginal tax rate 30%. Bonus depreciation enabled.

• • Qualifying cost: $7,000 × 100% = $7,000
• • Section 179 deduction: $7,000 (well below $1.25M cap)
• • Remaining basis after Section 179: $0
• • Bonus depreciation: $0 (nothing left)
• • First-year total deduction: $7,000
• • Tax savings at 30% rate: $2,100

Effective machine price after tax savings: $7,000 - $2,100 = $4,900. That is 30% off the sticker price. Without Section 179, the same $2,100 of tax savings would trickle in at ~$420/year for 5 years.

When NOT to take Section 179

Year 1 with low income. Section 179 cannot exceed your business taxable income. If you are in your first year with $3,000 of Schedule C net income and buy a $7,000 machine, you can only deduct $3,000 of Section 179 this year; the remaining $4,000 carries forward.

Expecting higher bracket next year. If you know you will be in the 32% bracket next year instead of the current 22%, delay some of the deduction. Regular depreciation captures the higher bracket for years 2-5.

State tax conformity issues. Some states (CA, NJ, others) do not conform to the federal Section 179 limits fully. Check your state tax rules before making the decision.