What is the Section 179 Deduction?
Many folks think the Section 179 deduction is some crazy & complicated tax code. Quite frankly, It isn’t that at all. Call us for details or pricing on equipment that qualifies- 303-407-3250
Why should I care about this if I own a business?
Section 179 within the IRS tax code simply allows businesses to deduct the full purchase price of (qualifying) equipment and/or software purchased or financed during the tax year. What that means is, if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross revenue. This is an incentive created by the U.S. Government to encourage businesses to buy equipment and invest in themselves. Sound familiar? I knew it did. This has also been referred to as the “SUV Tax Loop hole” or the “Hummer Deduction” years ago when many businesses used this same tax code to write-off the purchase of qualifying vehicles at the time that were over a certain weight (like SUV’s and Hummers). That program has been drastically reduced.
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. 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 (adding total equipment, software, and vehicles totaling less than $500,000 in 2011), the entire cost can be written-off on the 2011 tax return.
Who Qualifies for Section 179?
All businesses that purchase, finance, and/or lease less than $2 million in new, used, refurbished or reconditioned business equipment during tax year 2011 qualify.
What Equipment Qualifies?
Most tangible goods including “off-the-shelf” software as well as business-use vehicles (restrictions apply) qualify for the Section 179 Deduction. Also, to qualify for the Section 179 Deduction, the equipment and/or software purchased must be placed into service between January 1, 2011 and December 31, 2011.
What Should I Do Now?
If you have any remaining budget funds or the needs to replace any equipment, spend it before December 31st to take advantage of this deduction for the 2011 tax year.