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Maximize your deductions with Section 179.

How Can My Business Save Tax Dollars With Section 179?

You may have heard about Section 179 of the Internal Revenue Code, an exciting new way to minimize your tax burden. The good news? This part of the tax code was created to benefit small to medium-sized businesses just like yours! We’ve put together highlights of what 179 can do for you.

Understanding Section 179

Sec 179, for short, is a law that allows businesses to deduct the full purchase price of any equipment leased or financed during the tax year. While there are dollar limits and some stipulations, most companies can take advantage of IRC Section 179 for the 2016 tax year.

Section 179 Deductions

Section 179 expenses or deductions are simply how much money a company can save with this part of the tax code. Any qualified assets up to a certain amount can be expensed as long as they are placed into use during the current tax year.

How Much Money Can Section 179 Save You?

Every small to medium-sized business is different, and each of these companies will be able to use Section 179 in a different manner. The important fact to know about Internal Revenue Code (IRC) 179 is it’s truly a small business tax incentive and not created for large corporations. The spending cap for the current year under Section 179 is $500,000. This means if you finance a piece of equipment, you can deduct the Full Purchase Price (up to $500,000) from your gross income.  The old limit was $25,000.

This means you can purchase more equipment and still have the benefit of the Section 179 deduction.

For equipment purchases over the Section 179 deduction limit of $500,000 you can deduct an additional 50 percent of the amount over $500,000 in addition to the standard depreciation deduction.  This applies to equipment acquired and put into service during the 2015, 2016 and 2017 tax years. The bonus depreciation will phase down to 40 percent in 2018 and 30 percent in 2019.  The old limit was $0.

To break this down, if a company spends $500,000 on business equipment in the year, they would be eligible for a $500,000 equipment tax deduction under Section 179. Bonus depreciation old limit was $200,000, and in 2015, was raised to $2,000,000. This may be a bit oversimplified; however, this is the gist of Section 179 deductions. Understanding how this part of the IRS Tax Code works is one thing, but making it useful for your company is another. Just remember to run anything tax-related past your CPA.

Here at Lease Genie we understand the ins and outs of Section 179.  If you’re striving to maximize every penny in deductions, we know how to make this tax code work for your business. We finance clients of all credit ratings and help companies take advantage of Section 179 deductions. Contact us today.

Save your small business money with section 179 deductions.

What You Need to Know About Section 179 Deductions

It’s rare laws are enacted to help the small business owner, but there’s good news! A law has been created to lower the tax burden on small to medium-sized businesses. This law is designed to help family owned and operated businesses, instead of large corporations. If you own a small to medium-sized business, Section 179, also known as IRC 179 or IRS 179, can help you save money so you can boost your bottom line. Here’s what you need to know about Section 179 deductions.

What Are Section 179 Deductions?

Section 179 (part of the IRS tax code) allows a business to deduct the full purchase price of leased or financed equipment for the current tax year. This means you can write off the full purchase price of leased equipment with this equipment tax deduction. The equipment you write off must be within certain dollar limits specified within the code. Any equipment you deduct must be placed into use during the tax year the deduction is being claimed as well.

Bonus Depreciation

Bonus depreciation only covers new equipment after the Section 179 cap is reached. This is a significant advantage to smaller companies that operate on a tight budget. Another benefit some businesses receive from IRS Section 179 stems from carry-over bonus depreciation. Section 179 deductions usually come first, and then a company can claim bonus depreciation once certain limits are reached. If a business has net losses during a tax year, these bonus depreciation credits can carry over.

Section 179 Deduction Limits

Please keep in mind, as of 2016, the Section 179 deduction limits are capped at $500,000. The spending cap on equipment purchases is $2,000,000. The percentage limit regarding bonus depreciation is set to 50 percent this year.

How Can You Determine What Qualifies?

Nearly all types of business equipment will qualify for Section 179 deductions. Some examples include:

  • Machinery
  • Heavy equipment
  • Construction equipment
  • Business vehicles exceeding certain gross weight
  • Computers
  • “Off-the-Shelf” software
  • Office equipment
  • Office furniture
  • Printing presses
  • Large manufacturing tools
  • And more!

How Section 179 Benefits Your Business

By utilizing the appropriate equipment lease financing program and planning to implement new equipment in the field quickly, you can save a lot of money using Section 179 deductions. Small businesses no longer have to fight long-term depreciation struggles thanks to IRC 179. This new tax code helps small businesses keep the cash flowing! Please keep in mind tax laws can change and you should always consult your tax accountant.

If you’re struggling to finance the equipment your business needs, contact us. We can help you use IRC 179 to your advantage. Lease Genie provides financing to more than just “A” credit clients and looks forward to helping your business grow.