Section 179 of the IRS tax code allows businesses to deduct the purchase price of qualifying equipment purchased or financed during the tax year.
This means if you buy or finance qualifying equipment, you can deduct the FULL PURCHASE PRICE (up to $1 million total) from your gross income for the year.
This deduction is an incentive for small-to-medium businesses, so there’s a cap on how much you can spend on qualifying equipment each year — $2. 5 million — before your max deduction is reduced dollar-for-dollar. Spending $3 million on qualifying equipment would mean your max deduction is reduced to $500,000.
Most new and used equipment, purchased or financed, qualifies for the Section 179 Deduction.*
100% Bonus Depreciation for new and used equipment if equipment is purchased and placed into service by 12/31/19
As the IRS guidance continues to release guidance regarding the new tax law, it is critical for companies to work with a skilled tax professional to ensure they’re making the best decisions for their situation.