Section 179 vs. Bonus Depreciation for Construction Equipment After a Foundation to QuickBooks Enterprise Move

Written & reviewed by Ram Singh, founder, Numerawise Solutions · Last reviewed September 28, 2026

For 2026, Section 179 lets you expense up to $2,560,000 of equipment, but only up to your business’s taxable income — it cannot create a loss. Bonus depreciation is 100%, and now permanent, with no income cap, so it can create or increase one. Neither election lives inside Foundation’s books or QuickBooks’s: both platforms’ fixed-asset tools track book depreciation only, and the 179-or-bonus choice is made on Form 4562 by whoever files the return. After a mid-year platform move, that gap between the book asset register and the tax depreciation schedule is what gets missed — this is the mechanics of the choice, not tax advice for your specific return.

The 2026 numbers, from the IRS directly

Section 179, per the IRS’s Rev. Proc. 2025-32 (its 2026 inflation-adjustment guidance, reflecting the One Big Beautiful Bill Act’s changes to the base figures): the maximum deduction for property placed in service in 2026 is $2,560,000. That amount reduces dollar-for-dollar once total Section 179–eligible purchases for the year exceed $4,090,000 — a phase-out threshold high enough that most single-location contractors will not hit it in an ordinary year.

Bonus depreciation, per IRS Notice 2026-11 (interim guidance implementing OBBBA §70301): the rate is 100%, and it no longer phases down. The prior law would have stepped bonus depreciation down over time toward zero; OBBBA replaced that schedule with a flat 100% rate, with no expiration written into current law, for qualified property acquired after January 19, 2025. Both elections apply to new and used equipment alike — neither is restricted to factory-new machinery.

The difference that actually decides which one to use

The two elections do the same basic thing — write off the full cost of equipment in the year it’s placed in service — but they behave differently at the edges, and those edges are what should drive the choice for a contractor whose income swings by job and by year:

1. The income test. Section 179 is limited by taxable income for the year (Form 4562, Line 11); it cannot create or increase a loss, and unused amounts carry forward. Bonus depreciation has no such limit — it can push the business into a loss.
2. How you elect it. Section 179 is elected asset by asset, so you can pick which equipment gets the write-off. Bonus depreciation is the default for an entire MACRS class — you elect out of the whole class, not into one asset inside it, making it a blunter tool.
3. The lever for a feast-or-famine year. In a strong year, 179’s income cap lets a contractor accelerate just enough deduction to zero out taxable income without banking an unusable loss. With income to spare, bonus depreciation clears the whole class in one motion.

Layering is allowed — 179 first on Form 4562, bonus depreciation on what’s left, then ordinary MACRS on any remainder — but with 179 capped at $2,560,000 and bonus at 100%, most contractors expense the full cost through one election alone.

What carries over — and what doesn’t — in the migration

Foundation’s own product page describes its Fixed Assets Tracking Module (a separate, add-on module, not a default part of the system) as supporting “flexible, customizable GAAP and tax-recognized depreciation methods” — fixed-amount, formula, or percent-based, tied to job costing. Foundation’s page does not name Section 179 or bonus depreciation as one of those methods.

On the QuickBooks side, Intuit’s own help article for Fixed Asset Manager in QuickBooks Desktop Enterprise (updated August 5, 2026) describes a Methods tab and separate Book, State, AMT, ACE and Other columns, but likewise never names Section 179 or bonus depreciation as something the tool calculates. Intuit’s parallel article for the fixed-assets feature in QuickBooks Online Advanced and Intuit Enterprise Suite (also updated August 5, 2026) is explicit that the feature automates book depreciation only — straight-line, double-declining balance, or 150% accelerated — and does not mention Section 179 or bonus depreciation at all.

The practical result: whichever platform you land on, the equipment list — cost, in-service date, salvage value — carries over as a book asset register. The Section 179 or bonus depreciation election your CPA already took on a prior return does not live inside Foundation, Fixed Asset Manager, or QuickBooks Online’s fixed-assets feature — it exists only on Form 4562 and in your preparer’s own depreciation schedule. After the move, the book basis on your new system and the tax basis on the return will diverge, and someone has to reconcile that by hand rather than assume the conversion carried it across.

A worked example (illustrative figures, not a specific return)

Say a contractor buys a $180,000 excavator in August 2026, mid-migration from Foundation to QuickBooks Enterprise. Electing full Section 179 deducts the whole $180,000 this year — nowhere near the $2,560,000 cap — provided taxable income can absorb it; if income is short, only the usable portion applies and the rest carries forward. Electing bonus depreciation deducts the same $180,000 with no income test, but sweeps in the excavator’s entire 5-year MACRS class — so if the contractor also bought a used pickup this year and wants it on the regular schedule instead, only Section 179’s asset-by-asset election lets that pickup sit out.

Before the migration closes

Get the tax preparer’s Form 4562 detail — the asset list, the election already taken, and remaining basis on anything not fully expensed — before go-live, not after. Confirm which fixed-asset tool the new system will use and re-enter book values under useful-life and salvage-value terms that match your GAAP books, not tax-basis terms. And check state conformity: a number of states decouple from federal bonus depreciation or cap Section 179 below the federal figure, which means a state add-back regardless of which platform is tracking the books. None of this is a bookkeeping preference — it is a tax election, and it belongs in a conversation with the CPA who signs the return, ideally before either election is made or re-made around a mid-year platform switch.

Frequently asked questions

What is the Section 179 deduction limit for 2026?

$2,560,000, per the IRS’s Rev. Proc. 2025-32 inflation adjustment for 2026. That amount phases out dollar-for-dollar once total Section 179–eligible equipment purchases for the year exceed $4,090,000.

Is bonus depreciation still 100% in 2026?

Yes, and it is now permanent rather than scheduled to phase down. OBBBA §70301 replaced the prior step-down schedule with a flat 100% bonus depreciation rate for qualified property acquired after January 19, 2025, per IRS Notice 2026-11 — there is no future reduction written into current law.

Can I use both Section 179 and bonus depreciation on the same piece of equipment?

You can layer them — Section 179 is taken first on Form 4562, bonus depreciation applies to what is left, and ordinary MACRS depreciation applies to any remainder — but with 179 available up to $2,560,000 and bonus depreciation at 100%, most contractors end up expensing the full cost of a given asset through one election rather than needing all three layers.

Does QuickBooks or Foundation calculate my Section 179 or bonus depreciation for me?

No. Foundation’s Fixed Assets module, QuickBooks Desktop Enterprise’s Fixed Asset Manager, and the fixed-assets feature in QuickBooks Online Advanced and Intuit Enterprise Suite all track book depreciation — straight-line, declining-balance and similar GAAP methods — for your financial statements. The Section 179 and bonus depreciation elections are made on Form 4562 by whoever prepares your tax return, and none of these products’ own documentation lists those elections as something the software computes.

If the equipment sits inside a Foundation file you are still converting, Foundation to QuickBooks Enterprise covers what migrates and how job costs and history come across; Foundation vs QuickBooks Enterprise covers the feature-by-feature decision if you have not committed to the move yet.