For example, if you purchased a computer in 2009, you can deduct the entire cost of the computer, including sales tax, set-up fees, and shipping costs. It does not matter whether you paid cash or financed the computer. Unlike depreciation, however, you must use the asset over 50% of the time for business, and continue to use the asset over 50% during the years the asset would have been depreciated.

If you purchased a computer for $5,000 and use if for business 70% of the time, you can take a Section 179 deduction for $3,500. The remaining $1,500 is not deductible. If you used the computer 40% of the time, then you cannot take a Section 179 deduction. You can, however, depreciate the computer over 5 years based on 40% of the value of the computer ($2,000 spread over 5 years).