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An incentive designed to help businesses grow with the purchase of new, innovative equipment.
Section 179 is a tax code that allows business owners to take an immediate expense deduction for purchases of depreciable business equipment rather than capitalizing and depreciating the asset. Essentially, it’s an incredible incentive that lets you purchase, finance or lease equipment throughout the year and receive a huge break on your tax burden. Sounds great, doesn’t it? This is particularly helpful for businesses that have old, outdated technology but aren’t quite ready to fork over a ton of money to upgrade.
If the piece of equipment is financed or purchased, you’re able to use the deduction, as long as the full amount of the purchase price is eligible. The deduction limit for this year is $1,000,000 – that’s right, a full MILLION dollars. This is a serious deduction that can put a lot of money back into your bottom line. There is a “total equipment purchased for the year” threshold of $2,500,000. Keep in mind, the equipment purchased or financed must be put into use by December 31, 2019 at midnight.
Section 179 is helpful because it’s aimed at general business equipment. However, you’re also able to purchase off-the-shelf software too. Here’s a more thorough list of what equipment will qualify:
As long as the equipment is purchased outright, financed or leased and within the deduction limit, you’re able to deduct it. This includes new or used equipment.
There are quite a few technologies businesses should replace before the deadline of December 31, 2019 at midnight. Nothing lasts forever, and when it comes to technology, it’s better to be safe than sorry. If you’re using outdated technologies, you’re leaving your data, and ultimately, your livelihood at risk. Cybercriminals can exploit outdated technologies much easier than newer, more current technologies. Here are the main technologies you should upgrade this year to take advantage of the deduction:
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