This is a short post but a BIG topic. Tax season is getting closer. A scary thought for most Americans. As a business it is important to remember Section 179 and what that could mean for you.
Section 179 allows you, as a company, to deduct the full purchase price from your gross income of qualifying equipment or software. This works whether you purchase the equipment outright, or if you lease the equipment in that tax year. The government does this to encourage businesses to invest in themselves and to continue to update their company.
How Does Section 179 work?
It can be a little tricky and more information can be found at www.section179.org. That website gives the example of:
When your business buys certain items of equipment, it typically gets to write them off a little at a time through depreciation. In other words, if your company spends $50,000 on a machine, it gets to write off (say) $10,000 a year for five years (these numbers are only meant to give you an example).
Now, while it's true that this is better than no write-off at all, most business owners would really prefer to write off the entire equipment purchase price for the year they buy it.
In fact, if a business could write off the entire amount, they might add more equipment this year instead of waiting over the next few years. That's the whole purpose behind Section 179 - to motivate the American economy (and your business) to move in a positive direction. For most small businesses, the entire cost can be written-off on the 2016 tax return (up to $500,000).
In the year 2015, the government put a $500,000 cap to the total amount written off and a total of $2,000,000 for equipment purchased, after that 2 million mark the deductions begins to phase out dollar-for-dollar.
I’m not an accountant, so it’s best to do some research of your own to determine if this is right for your company. Be sure to check out www.section179.org or talk with your accountant for more information on this topic.
We'd be happy to talk with you about what this could mean for your business and your printers and copiers. Let us know if you have any questions!