Essentially, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income.
It’s the end of the year. Businesses are busily reviewing their bottom line and – perhaps – scanning every corner of their organization for any sort of competitive boost as 2020 looms around the corner.
Small business owners or managers may not be aware of an incentive that could forge a huge technology and productivity boost in their immediate future: Section 179 Deduction of the IRS Tax Code. For companies looking to invest in office equipment, computers or other technology hardware, Section 179 could be a big incentive for a purchase toward your office workflow productivity moving forward.
Consider it the government’s way of encouraging you to invest in yourself this holiday season.
What’s the Deduction?
Essentially, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income.
What are the Deduction details in 2019?
2019 Deduction Limit = $1,000,000
This deduction is good on new and used equipment, as well as off-the-shelf software. To take the deduction for tax year 2019, the equipment must be financed or purchased and put into service between January 1, 2019 and the end of the day on December 31, 2019.
2019 Spending Cap on Equipment Purchases = $2,500,000
This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced on a dollar for dollar basis. This spending cap makes Section 179 a true “small business tax incentive” (because larger businesses that spend more than $3.5 million on equipment won’t get the deduction.)
Bonus Depreciation: 100% for 2019
Bonus Depreciation is generally taken after the Section 179 Spending Cap is reached. The Bonus Depreciation is available for both new and used equipment.
What do the numbers look like?
Interested in crunching the numbers? This handy online calculator helps you visualize a potential tax benefit scenario by leveraging Section 179 of the IRS tax code.
What can Datamax do to help?
If you're interested in taking advantage of this incentive and boost, please give us a call. We've been in business for more than 60 years and have provided in-house leasing services since 1975 through the Datamax Leasing Division. By leasing with Datamax, you can take advantage of technology to grow your business now instead of waiting.
