If you’re eyeing a significant deduction (and who isn’t?), the Section 179 IRS tax code allows businesses to deduct up to $1,080,000 on qualifying capital equipment. However, there’s a cap—businesses can’t spend more than $2,700,000 on such equipment during the tax year to be eligible for this deduction.
To qualify, the equipment must be purchased and in use by 11:59 p.m., December 31, 2024. With supply chain challenges still a concern, it’s wise to make your business purchases sooner rather than later to avoid any last-minute stress.
❓ How much can I save?
Section 179.org offers a simple-to-use calculator to help you estimate your tax savings. Enter the price of your equipment or software to see how much you can save.
❓What qualifies?
According to the Section 179 FAQs, “Most tangible equipment that businesses purchase or lease will qualify for the deduction.”
Common equipment includes machinery, computers, computer off-the-shelf software, office furniture and equipment, qualifying vehicles, or other tangible goods. Qualifying business vehicles with a gross vehicle weight in excess of 6,000 pounds are also included. Property attached to your building that is not a structural component of the building (i.e., a printing press, large manufacturing tools, and equipment) is included. Also, certain improvements to existing non-residential buildings, such as fire suppression, alarms and security systems, HVAC, and roofing are included.
Now is the time to act on this valuable tax-saving opportunity. Tax regulations can change, sometimes even mid-year, so it’s crucial to take advantage of this break while it’s available. Contact us to ensure you’re maximizing your equipment maintenance and purchase deductions.
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Download our latest Year-End Tax Planning Guide today to stay ahead of the game. Let’s chat about how your business purchases and equipment maintenance can give you the deductions you deserve.
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