What is Section 179?
Business owners who acquire equipment for their business, whether it’s machinery, computers, software or other tangible goods, may elect an enhanced deduction in a single tax year rather than a little at a time over several years. This deduction is known by its section in the tax code, a Section 179 deduction.Under Section 179, businesses that spend less than $2,000,000 a year on qualified equipment may write-off up to $500,000.
How is Section 179 Profitable?
By financing your equipment purchase with Capital Leasing, your company can actually earn a profit from your Section 179 Tax Deduction. Your company may be able to deduct the full purchase price of the equipment for the current year’s taxes, but only pay a fraction of the cost with monthly payments. The amount you save on taxes can actually exceed the payments you make during the taxable year.Don’t spend your hard-earned cash on equipment that depreciates in market value! Invest your cash in the growth of your company and earn returns that exceed the cost of financing.
Tax Code Section 179 & Election to Expense Detail
The election, which is made on Form 4562, is for the tax year the property was placed in service or an amended return filed within the time prescribed by law. The total cost of property that may be expensed for any tax year cannot exceed the total amount of taxable income during the tax year. Section 179 property is property acquired for use in the active conduct of your business. To ensure property qualifies, reference Publication 946.
Contact your tax adviser for the specific impact to your business or visit www.irs.gov.
Note: Capital Leasing does not provide legal, tax, or accounting advice. We recommend customers obtain and rely upon such advice from their own accountants, auditors, attorneys, or other professional advisers. For complete details or changes, please visit www.irs.gov or contact the IRS helpline at: 800-829-4933.
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