IRS Section 179
Section 179 of the IRS tax code allows businesses to deduct the full price of qualifying equipment and/or software purchased or financed during the tax year.
If your customer leases a piece of qualifying equipment, then they can deduct the FULL PURCHASE PRICE from their gross income.
This incentive was created by the U.S. government to encourage businesses to purchase equipment and invest in operation.
2018 IRS Section 179 Deduction
2018 Deduction Limit = $1,000,000
This deduction is applicable to new and used equipment, as well as off-the-shelf software. To take the deduction for tax year 2018, the equipment must be financed or purchased and put into service between January 1, 2018 and the end of the day on December 31, 2018.
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 available to your company begins to be reduced on a dollar for dollar basis. This spending cap makes Section 179 a true "small business tax incentive."
Bonus Depreciation is 100% for 2018
Bonus Depreciation is generally taken after the Section 179 Spending Cap is reached. The Bonus Depreciation is available for both new and used equipment.
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