Section 179

Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment during the tax year.

Fast Facts about the Section 179 tax deduction:

  • Tax code created to help businesses.
  • Valid on most types of equipment.
  • Can greatly help your bottom line.
  • Simple to use.
  • Enhancements typically expire at year’s end.
  • There is simply no better time than now.

Essentially, Section 179 works like this:

When your business buys certain items of equipment, it typically gets to write them 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.

In fact, if a business could write off the entire amount, they might add more equipment this year instead of waiting over the next few years. That’s the whole purpose behind Section 179 – to motivate the American economy (and your business) to move in a positive direction. For most small businesses, the entire cost can be written-off on the 2017 tax return (up to $500,000).

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