What to Know About the Section 179 Tax Incentive

Saving Money on New and Used Equipment Purchases

A part of the IRS tax code, Section 179 allows companies to deduct the full purchase price of qualifying equipment bought or financed during that same tax year. This tax incentive is designed to encourage businesses to purchase the equipment they need to grow.

The Section 179 deduction applies to tangible personal property such as machinery and equipment purchased for use in a trade or business, and if the taxpayer elects, qualified real property.

Deductions are possible on new and used equipment financed or purchased and put into service between January 1 and December 31.

The Section 179 allows you to deduct the cost of qualifying equipment up to $2500,000, rather than depreciating the cost over a period of several years. The maximum dollar amount of equipment you can purchase in any calendar year is $4,000,000 before the deduction is reduced dollar for dollar.

In addition, 100% bonus depreciation can be taken on new and used equipment purchases!

What you can deduct:

  • New or used equipment purchased for business purposes
  • Vehicles with a gross weight above 6,000 pounds as long as they are used solely for business
  • Non-structural property attached to your business – especially large pieces of equipment
  • Improvements made to non-residential buildings – new roofs, alarms, fire-suppression systems

What you CAN’T deduct:

  • Land, buildings, permanent structures
  • Property used outside of the U.S. (some exceptions)
  • Property used to furnish lodging
  • Property that was gifted or inherited
Equipment

BENEFITS OF SECTION 179 DEDUCTIONS

  • Immediate expense deduction, providing significant tax savings for your business.
  • Encouragement of growth and scalability through the acquisition of new equipment.
  • Increased financial flexibility by improving your business’ bottom line.

DEDUCTIONS CALCULATOR

Determining your potential savings from Section 179 is simple. Input your numbers and the calculator provides an estimate of tax savings and your net cost after tax. Many businesses find that if they finance or lease their Section 179 qualified equipment, the tax savings can exceed the first year’s payments on the equipment. Calculate Your Potential Savings Here.

 

Riekes has equipment available now for you to take advantage of Section 179 this year!

 

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