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 2019 tax return (up to $1M).
Tax Deduction Limit - $1,000,000
The new deduction limit is $1M, which is good on new and used equipment
& off-the-shelf software.
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.
100% Bonus Depreciation
Bonus Depreciation is generally taken after the Section-179 spending cap is reached and is available for new and used equipment. The bonus depreciation is made retroactive to 9/27/2017 and good through 2022.
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.