Most freelancers know they can deduct equipment. Fewer know they can deduct the entire cost in the year they buy it — often without the multi-year depreciation schedule that used to make equipment deductions complicated. Section 179 and bonus depreciation are the two mechanisms that make this possible.
Here is how they work for 2024.
What Section 179 Does
Section 179 of the Internal Revenue Code lets you deduct the full purchase price of qualifying business property in the year you place it in service — rather than depreciating it over its useful life (typically 5–7 years for computers and equipment).
2024 limits:
- Maximum Section 179 deduction: $1,160,000
- Phase-out begins at: $2,890,000 in total property placed in service
- Phase-out is dollar-for-dollar above $2,890,000 (irrelevant for most freelancers)
For individual freelancers and sole proprietors, the practical limit is your net income from the business. Section 179 cannot create a net loss — the deduction is limited to your taxable income from active business activities. You can carry forward unused Section 179 deductions to future years.
What Bonus Depreciation Does
Bonus depreciation is a separate mechanism that allows immediate expensing of qualifying property. Unlike Section 179, bonus depreciation can create or increase a net loss (which may offset other income).
2024 bonus depreciation rate: 60%
This has been phasing down from 100% (which applied from 2017–2022):
- 2022: 100%
- 2023: 80%
- 2024: 60%
- 2025: 40%
- 2026: 20%
- 2027: 0% (unless Congress extends it)
Most freelancers use Section 179 first (simpler, full deduction), then bonus depreciation on anything Section 179 doesn't cover or on amounts exceeding the business income limit.
What Qualifies
Generally eligible:
- Computers, laptops, tablets, monitors
- External hard drives, SSDs, docking stations
- Phones (business-use percentage only)
- Printers, scanners, copiers
- Camera equipment used for business (photography, videography, content creation)
- Audio equipment (microphones, interfaces, headphones) for podcasting, production, client calls
- Projectors and presentation equipment
- Office furniture used exclusively in your home office (desk, chair, shelving)
- Software with a useful life greater than one year
- Vehicles used for business (subject to separate luxury auto limits — see below)
Not eligible:
- Real property (buildings, land)
- Property not used in your trade or business
- Property purchased from a related party
- Software that's an integral part of real property
The Business-Use Percentage Rule
If you use equipment for both business and personal purposes, you can only deduct the business-use percentage. Document your business use ratio — the IRS can ask for it.
Example: You buy a $3,000 laptop. You use it 70% for freelance work, 30% for personal use. Your Section 179 deduction: $3,000 × 70% = $2,100.
If business use of a computer drops below 50% in a later year, you may have to recapture (repay) some of the Section 179 deduction. Keep records of how equipment use changes.
Vehicle Deductions Under Section 179
Vehicles are subject to annual IRS “luxury auto limits” that cap the first-year depreciation deduction:
- Passenger automobiles (including SUVs under 6,000 lbs GVW): $12,400 first-year depreciation limit for 2024 (including bonus depreciation)
- Heavy SUVs (GVW over 6,000 lbs): Section 179 capped at $28,900 for 2024
Many self-employed people with high vehicle use find the standard mileage rate ($0.67/mile for 2024) simpler and more valuable than actual expense tracking with depreciation. Run the numbers both ways for your situation — the Mileage Deduction Calculator compares both methods.
Real Examples for Freelancers
Example 1: Designer buys a new MacBook Pro
- Purchase price: $2,499
- Business use: 90%
- Eligible amount: $2,249
- Section 179 deduction: $2,249 (full amount, in year of purchase)
- Tax savings at 24% bracket: ~$540
Without Section 179, the $2,249 would be depreciated over 5 years (~$450/year). Section 179 accelerates that entire deduction into year one.
Example 2: Video producer buys camera equipment
- Camera body: $3,800
- Lenses and accessories: $2,200
- Lighting rig: $1,500
- Total: $7,500
- Business use: 100%
- Section 179 deduction: $7,500 (full amount)
- Tax savings at 22%: $1,650
Example 3: Home office furniture
- Standing desk: $800
- Ergonomic chair: $500
- Bookshelves: $300
- Total: $1,600
- Business use: 100% (exclusive home office use required)
- Section 179 deduction: $1,600
- Tax savings at 22%: $352
These savings reduce your Schedule C net income, which reduces both income tax and self-employment tax simultaneously.
The Timing Consideration
Section 179 applies in the year you place the property in service — the year you actually start using it for business. Bought a laptop in December? Deduct it in full this year, even if you didn't start serious work on it until January.
This creates a legitimate year-end tax planning opportunity. If you anticipate higher income in the current year than next year, buying equipment before December 31 and using Section 179 gives you the deduction in the higher-income year.
Conversely, if you expect significantly higher income next year, waiting until January to buy equipment means the deduction lands when it reduces your taxes more.
How to Claim It
On your tax return: Section 179 is claimed on Form 4562 (Depreciation and Amortization), which flows through to your Schedule C. Tax software (TurboTax Self-Employed, H&R Block Premium) handles this automatically when you enter the asset purchase.
Records to keep: Purchase receipt or invoice, the date you placed it in service, proof of business use (photos of your office setup can help establish home office equipment use).
The Bottom Line
Section 179 makes equipment deductions simple: buy qualifying property for your business, use it this year, deduct the full business-use portion this year. The $1,160,000 limit is far beyond what any individual freelancer would spend, so the practical cap for most people is just your net business income.
Bonus depreciation fills the gap if Section 179 is limited (by the business income cap) or if you want to create a loss. At 60% for 2024, it still accelerates most of the deduction into year one.
Equipment that improves your ability to earn income reduces your tax bill simultaneously. That's the closest thing to a free lunch the tax code offers. Use the Home Office Deduction Calculator to model the combined impact of your workspace and equipment deductions, and the Self-Employment Tax Calculator to see how they reduce your total tax burden.