An extraordinary tax reduction opportunity is again available for American businesses.
Every year the US Congress approves section 179 of the IRS Tax code that provides a significant business tax deduction.
In one sentence — Rather than depreciating the acquisition cost of business equipment (be it new, used or leased) over several years or the useful life, the entire cost can be deducted in the same year it is purchased.
SIX ESSENTIAL FACTS TO KNOW ABOUT SECTION 179
[1] The deduction limit in 2017 is $500,000
[2] The equipment must be acquired and put into service in the same calendar year the deduction is taken.
[3] Vehicles can qualify, and so can equipment that is used “partially” for business.
[4] There is a “spending cap” after which the amount of the deduction begins to be reduced. In 2017, this cap is $2,000,000.
[5] “Bonus depreciation” can be used when the “spending cap” is exceeded. Check with your tax adviser or the section 179 website for more insight.
[6] Section 179 was added to the tax code in 2008 and it might be around for a while longer. The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) has set this $500,000 limit as the annual standard. Prior to this act, the amount was subject to congressional approval each year and businesses were unable to plan.
2017 section 179 tax deduction write off
SOME WEBSITES TO FOR MORE DETAIL
The Quick Big Picture Overview
WHAT PURCHASES QUALIFY?
As a rule, if you use it in your business, it probably qualifies.
The Section 179 website provides a list, and your tax advisor should have the final say so, but as a quick overview, the following purchases are very likely acceptable:
- Office furniture
- Office equipment
- Computer Hardware
- Computer software
- Business Vehicles
THE DOOR IS OPEN NOW
Section 179 is a tax incentive that has been re-approved by Congress each year since its inception and the PATH Act of 2015 made this $500,000 deduction a permanent part of the code. You can deduct up to $500,000, but only until expiration on 12/31/2017, so act now.
Dale Brodsky, Founder & Owner of Fundus Photo — provides a broad range of quality ophthalmic imaging and equipment featuring Fundus Photo’s “NewVision Ophthalmic Imaging Suite”, software designed specifically for ophthalmic imaging and image management. We’re listening, too.