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Don’t Forget to Take Advantage of IRS Section 179 Deduction on New or Used Equipment

What is Section 179?
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. What this means is…that if you buy (or lease) a piece of qualifying equipment, you can deduct the full purchase* price from your company’s gross income. It’s an incentive created by the U.S. government to encourage businesses to buy equipment and invest back into themselves.

*2015 Deduction Limit = $25,000
This deduction is good on new and used equipment, as well as off-the-shelf software. This limit is only good for 2015, and the equipment must be financed/purchased and put into service by the end of the day, 12/31/2015.

2015 Spending Cap on equipment purchases = $200,000
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”.

Bonus Depreciation: not available in 2015
In prior years, Bonus Depreciation would be taken after the Section 179 Spending Cap is reached. Note: Bonus Depreciation was available for new equipment only; in 2015, Bonus Depreciation is not available at all.