What are Section 179 Deductions?
The IRS enacted Section 179 deductions to promote small businesses growth. When you make capital expenditures, like equipment or software, you can deduct the cost of the asset over time. That is basic depreciation.
The advantage of Section 179 is the ability to take 100% Deductions for qualified assets purchased and placed in service in the same year. Taking the full deduction will save you significant money on your business tax return. The Section 179 Deduction limit is $500,000 for all of 2017.
Qualified property can be elected for the Section 179 deduction. Most tangible business equipment will qualify for the deduction. This includes new, certified pre-owned, refurbished or used equipment. It should be purchased and available for use by the end of the last day of the tax year. Most businesses find equipment financing to be very helpful for significant equipment purchases.
Taking Your 179 Deduction in 3 easy steps
Purchase qualified equipment during the tax year.
Keep records of the purchase price, date, freight, installation and in-service date for qualified purchases.
Take the 179 Deduction for the total cost of all purchases, up to $500,000. Don’t forget to include additional charges for taxes, freight, and installation.
Additional Resources are Available. There are additional deductions for purchases over $500,000 up to $2 million. Visit section179.org for more information. DentalAssets.com is not a tax advisor, so please consult your tax advisor for specific details relating to your specific situation.
IMPORTANT: The 179 deduction can provide significant tax relief for this tax year. Act now to select and order your equipment, arrange financing if needed and have everything delivered and in place by year end. Having this deduction in place with any time to plan has not happened in years!
January 1, 2017 The Section 179 deduction remains at $500,000 for 2017 as enacted by the PATH act.
For more information visit Section179.org.
Read the Ways and Means Committee summary of the bill here.
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Strategic equipment investments for your business could significantly reduce your tax liability and cost of ownership.