Gobble up savings with Section 179 tax breaks
Section 179 is a true “small business tax incentive”
Here’s How Section 179 works, according to section179.org:
In years past, when your business bought qualifying equipment, it typically wrote it off a little at a time through depreciation. In other words, if your company spends $50,000 on a machine, it gets to write off (say) $10,000 a year for five years (these numbers are only meant to give you an example).
Now, while it’s true that this is better than no write-off at all, most business owners would really prefer to write off the entire equipment purchase price for the year they buy it.
And that’s exactly what Section 179 does – it allows your business to write off the entire purchase price of qualifying equipment for the current tax year.
This has made a big difference for many companies (and the economy in general.) Businesses have used Section 179 to purchase needed equipment right now, instead of waiting. For most small businesses, the entire cost of qualifying equipment can be written-off on the 2024 tax return (up to $1,220,000).
Who qualifies for Section 179?
All businesses that purchase, finance, and/or lease new or used business equipment during tax year 2024 should qualify for the Section 179 Deduction (assuming they spend less than $4,270,000).
Qualifying Equipment: including but not limited to
- Computers/servers
- Business phone systems
- Security/Surveillance systems
- Software
- Machinery/vehicles
- Office furniture
2024 Deduction Limit = $1,220,000
This deduction is good on new and used equipment, as well as off-the-shelf software. To take the deduction for tax year 2024, the equipment must be financed or purchased and put into service by December 31, 2024.
2024 Spending Cap on equipment purchases = $3,050,000
This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced on a dollar-for-dollar basis. This spending cap makes Section 179 a true “small business tax incentive”.
Bonus Depreciation: 60%
Bonus Depreciation is generally taken after the Section 179 Spending Cap is reached. The Bonus Depreciation is available for both new and used equipment.
Resource: Section 179 Deduction Calculator
For more information, visit www.section179.org and contact your Tax Advisor to see how your business may benefit from this tax deduction!