The deduction is limited to small and mid-sized businesses. When a company spends more than $2 million on qualifying purchases it begins to phase out (i.e., taxpayers can expense $500,000 in purchases as long as total purchases don't exceed $2 million). It is completely eliminated for those that spend more than $2.5 million annually.
Equipment is an ongoing necessity for all businesses. Whether small or large equipment is needed, Section 179 is designed to make purchasing the equipment, during this calendar year, financially attractive. Furthermore Section 179 gives business owners the opportunity to upgrade to energy efficient and technologically advanced equipment in order to comply with the Department of Energy's new standard regulation.
Qualifying material goods of Section 179 Deduction
In order to qualify for Section 179 deduction the equipment listed below must be purchased new and put in to use between January 1 and December 31 of the current tax year.
- Equipment (machines) for business use
- Hot/cold unit
- Tangible personal property used in business
- Refers to any type of property that can generally be moved (i.e., it is not attached to real property or land), touched or felt. These generally include items such as furniture, clothing, jewelry, art, writings, or household goods
- Computer Software purchased “off-the-shelf”
- Office Furniture
- Office Equipment
- Business vehicles with a gross weight over 6000lbs.
- Property attached to your building that is not a structural component (i.e.: large manufacturing tools and equipment)
- Partial Business Use (equipment that is purchased for business use and personal use: generally, your deduction will be based on the percentage of time you use the equipment for business purposes).
How Will I Benefit For Current 2015 Tax Year?
As long as equipment was purchased and put to use before December 31, 2015 Section 179 will provide you with a substantial tax relief. Crest Capital has supplied a helpful 2015 calculator to help assist you in pin-pointing your Section 179 qualified financing at the link below.
Although Section 179 has become permanent, the 50% bonus depreciation is not. Currently it is set to reduce to 40% in 2018, and 30% in 2019. Make sure to educate yourself on Section 179, so you can take full advantage of this huge tax break. If your company is in need of new equipment, strike while the iron is hot. Don’t miss out on this opportunity to decrease taxes and increase your bottom line.
Don’t forget Clark Service Group offers premier equipment installation for all your food service equipment. Visit www.clarkservicegroup.com or call us at 1-800-678-5517 to schedule your installation.
Also visit our other Clark divisions for all of your food service equipment needs:
Written By: Becky Simmons