Deduction Limitations The 179 expense deduction is subject to three limitations, applied in this order. 1. Ceiling Amount. A taxpayer's 179 deduction cannot exceed an annual ceiling amount ($1,080,000 in 2022; $1,050,000 in 2021). 2. Property Placed in Service Maximum. The 179 deduction ceiling amount ($1,080,000 in 2022) is reduced dollar for dollar when 179 property placed in service during the taxable year exceeds a specified maximum amount ($2,700,000 in 2022; $2,620,000 in 2021). In 2022, a taxpayer who places in service $3,780,000 or more of qualifying property ($1,080,000 + $2,700,000) cannot claim a 179 deduction. 3. Business Income Limitation. The 179 deduction allowed for a taxable year cannot exceed the taxpayer's business income for the year. Ceiling Amount. A taxpayer can choose to use all, part, or none of the annual 179 amount. If a business expects its marginal tax rate to increase in the future, it may decide not to use the 179 deduction. In such a situation, it may be better to defer deductions to those later years. As discussed below, the business income limitation also may lead a business owner to choose not to expense assets.