Write-off Your Equipment Purchases
What Is Section 179?
Section 179 was created with businesses in mind. That’s why almost all types of “business equipment” that your company buys or finances qualify for the tax deduction.
All businesses require equipment on an ongoing basis, whether it’s machinery, computers, software, office furniture, vehicles, or other tangible goods. It’s possible that your business will purchase many of these goods during the year, and will do so again and again. Section 179 is designed to make purchasing that equipment during this calendar year financially appealing.
Section 179 Equipment Deduction at a Glance for 2018
2018 Deduction Limit = $1,000,000
This deduction is good on new and used equipment, as well as off-the-shelf software. This limit is only good for 2018, and the equipment must be finance/purchased and put into service by the end of the day, 12/31/2018.
2018 Spending Cap on equipment purchases = $2,500,000
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” (because larger businesses that spend more than $3.5 million on equipment won’t get the deduction.)
Bonus Depreciation: 100% for 2018
Bonus Depreciation is generally taken after the Section 179 Spending Cap is reached. The Bonus Depreciation is available for both new and used equipment.
To take advantage of these tax deductions for the 2018 tax year, you need to act before the end of this year.
Note: This is provided by BrenCo as a courtesy to equipment buyers and should not be construed as tax advice or as a promise of potential tax savings or reduced tax liability. Please contact your own CPA or tax attorney to see how this may apply to your situation.