Great news for all businesses across the United States, the US government has increased Section 179’s tax deduction limits for this year’s (2016) equipment purchases to a whopping $500,000! Additionally the bonus depreciation amount has been extended to 50%.
If you are a business owner and have not heard of Section 179 you have luckily made it to the right place. Keep reading to discover how to save your business thousands of dollars on business equipment leases and purchases year after year.
What is Section 179? Section 179 was put in place by the US government to support and stimulate business growth by allowing businesses to write off business equipment leases and purchases from their yearly taxes. Utilizing Section 179 results in thousands of saved dollars the business can put back into its pockets and in turn the economy. It is easily the most beneficial tax benefit for small businesses.
Each year the deduction amount is voted on. Three years ago the deduction limit was high, last year the limit was very low, and this year it has increased dramatically again to $500,000!
How does it work? When tax time comes, gather all equipment costs throughout the calendar year. Hopefully your accountant can easily send that over, or you might have to do a little work. You can find the Section 179 deduction on tax form 4562. Your business can expense business equipment up to $500,000. If the equipment costs are greater than $500,000, unfortunately the overage cannot be deducted.
Once you have completed all tax documents and form 4562 in its entirety, send all forms together to the IRS. You have officially applied for the deduction! The process is very simple and your business has nothing to lose!
In addition equipment leasing and financing has additional section 179 benefits, learn more here.
To apply for Equipment Financing, get started here.