What You Need to Know About the Section 179 Tax Deduction
Most people think that the IRS Section 179 Tax Deduction is some mysterious or complicated tax code. It really isn't, as you'll see.
Essentially, Section 179 allows businesses to deduct the full purchase price of qualifying equipment during the same tax year that they purchased it. That means if you buy a piece of qualifying equipment, like a video wall or new office furniture, by the end of the year, you can deduct the full purchase price up to a taxable loss from your gross income.
This is a huge incentive to encourage business owners to purchase new equipment and invest in themselves. Across the nation, millions of small businesses are taking action and reaping the benefits of these deductions.
So how does it work?
Without the Section 179 deduction, when your business purchases qualifying equipment it typically gets to write them off a little at a time through depreciation.
As an example, if your company spends $75,000 on new equipment. It gets to write off $15,000 a year for five years. Now while it's true that this is better than no write-off at all, most business owners would prefer to write off the entire purchase price in the year they buy it. Potentially reducing their tax liability.
In fact, if a business could write off the entire amount, they might add more equipment instead of waiting over the next few years. That's the whole purpose behind Section 179. To motivate the economy, to keep your business moving in the right direction, and to stay competitive. Now, in 2018, the entire cost can be written off, up to $500,000. This is a big increase compared to years previous to 2016.
So who can qualify for Section 179?
Any businesses that purchases, finances, or leases less than $2,000,000 in business equipment during the tax year 2018 should qualify. The equipment must be used for business purposes more than 50% of the time.
Don't let this opportunity pass you by. Remember, for this deduction, equipment must be purchased or leased and placed into service by the end of this year.
2018 is coming to a close soon, so contact The Office People today, before it's too late. Let us help you take advantage of Section 179 and grow your business.
Click here to request a copy of our furniture catalog that includes 50% off all Office Source furniture. Offer ends December 31st, 2018.
Note: Please consult your tax advisor as to your particular tax savings.