US raises section 179 expensing limit to $2.64 million for 2027

The ceiling increases from $2.56 million for 2026. The deduction begins to phase down when the cost of section 179 property placed in service during the year exceeds $4.23 million. For sport utility vehicles within the separate statutory cap, the 2027 limit is $33,100. The figures generally apply to taxable years beginning in 2027 and therefore normally affect returns filed in 2028.^[1][2]

Immediate-expensing mechanism

Section 179 allows an electing taxpayer to deduct qualifying property costs up to the annual ceiling instead of recovering them solely through depreciation. The phase-down reduces the available ceiling dollar for dollar once relevant investment exceeds the stated threshold, so a larger acquisition programme can eliminate the section 179 deduction even though individual assets would otherwise qualify. The inflation adjustment changes the monetary limits, not the underlying eligibility conditions.^[1][2]

Planning consequence

US businesses and multinational groups with US taxpayers should incorporate the new ceiling and phase-down into 2027 capital-expenditure forecasts. The published amount does not establish whether a particular asset is qualifying section 179 property, whether business-income limitations restrict the deduction, or how the election interacts with other depreciation provisions. Those questions remain taxpayer- and asset-specific.^[1][2]

Source qualification

The IRS news release states the 2027 amounts directly. Its linked Revenue Procedure 2026-35 contains the detailed section 179 table and effective-year provisions, but the purpose section still contains unreplaced release-date placeholders. The amounts are therefore supported by the dated IRS release; a clean final procedure should be checked before relying on the PDF for points beyond the stated figures.^[1][2]