Yes, the Section 179 can offset your W-2 wages. Only the business percentage can be use for Section 179, but all of the Section 179 that is allowable (the business percentage) can offset your W-2 wages.
There are several "howevers":
- Is the business open in 2016? You can't deduct or depreciate things until the business is 'open'.
- If it is under 6000 pounds, it is probably limited to $11,460 (2015 amount) multiplied by the business percentage.
https://www.irs.gov/publications/p463/ch04.html#en_US_2015_publink100034025
- It may not be in your best interest to use Section 179 when there is no income. Usually, deductions and depreciation will save you both income taxes and self-employment tax. With no income, it will not save you any self-employment tax. In other words, shifting the depreciation to years that the business has a profit could save you more money overall.
