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.
This means if you finance or lease a piece of qualifying equipment, you can deduct the full purchase price from your gross income.
It's an incentive created by the U.S. government to encourage businesses to buy equipment and invest in themselves. For most small businesses, the entire cost can be written-off on the 2018 tax return (up to $1M).
What's New For 2018?
2018 Deduction Limit - $1,000,000
The new deduction limit is $1M, which is good on new and used equipment
& off-the-shelf software.
2018 Spending Cap on Equipment Purchases - $2,500,000
This is the maximum amount that can be spent on equipment before the Section-179 Deduction begins to reduce on a dollar-for-dollar basis. This $2.5M spending cap makes Section-179 a true small business tax incentive.
Bonus Depreciation - 100% for 2018
Bonus Depreciation is generally taken after the Section-179 spending cap is reached and is available for new and used equipment.
Dao Financial Solutions does not give tax advice; please consult with your tax advisor to determine your savings and specific tax implications
of equipment finance leases.