Save Money & Invest In The Future With The Section 179 Tax Deduction

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Section 179 is a part of the IRS tax code that lets businesses deduct items like equipment and software when filing taxes. It is particularly beneficial for small businesses because it allows you to deduct the full purchase price, whether leased, financed, or bought outright, as long as the company spends less than $2.5 million on equipment in the 2018 tax year. This includes new and used assets like vehicles, office equipment, computer equipment, and off-shelf software that is used more than 50% of the time for express business purposes.

It is possible to receive a deduction for total purchases up to $3.5 million, but it will continue to reduce for every dollar you go above $2.5 million because there is a deduction limit of one million dollars.

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With an equipment purchase of $1.15 million at a 35% tax rate, you will receive a cash savings of $402,500 thanks to the Section 179 and Bonus Depreciation deductions. (Image courtesy of Currency.)

Helpful Resource

The financial solutions company Currency recently created a web page that highlights the savings potential for taking advantage of the deduction. Currency points out that for the 2018 tax year, businesses are allowed a Bonus Depreciation Deduction of 100% for further savings, and offers an example of how this combined with the Section 179 deduction will impact the total cost of equipment after taxes.

Now Is The Time

The official Section179.org website offers a calculator where you can enter the cost of your equipment, as well as your assumed tax bracket, and see the Section 179 deduction, Bonus Depreciation deduction, and total cash savings. With the end of year quickly approaching, now is an excellent time to take advantage of these deductions while investing in the future of your company. You can visit Section179.org and access its features at www.section179.org .

Currency is a Sandhills Publishing partner. Currency offers equipment financing solutions through Express and enables sellers to accept multiple payment types with Currency Pay.

This post is not meant to be tax guidance. See a qualified tax professional for advice. Consult your accountant to take advantage of Section 179.