Tax- Year Deductions: Section 179
Dec. 1 2017
State Contracts
Information for Businesses
It is never too early to be focusing on your upcoming taxes, however, you can be too late. If you are a small business executive, you probably know about Section 179 and already know all the benefits of it. However, there have been some changes and updates made to Section 179 for this year and coming years. Section 179 is currently permanent at a $500,000 level until further notice. Businesses that exceed $2 million purchases of qualifying assets have the deduction phase-out dollar for dollar. They are completely eliminated above $2.5 million. In addition, the cap of Section 179 will be indexed to inflation at increments of 10,000 for years to come. What does this mean? This means that for taxable years beginning this year in 2017, the aggregate cost of any eligible 179 assets cannot exceed $510,000 and is reduced dollar for dollar if the cost of the property or asset exceeds $2,030,000. If you are looking to deduct the full price of your equipment from your 2017 taxes, the equipment must be purchased and in service by the end of the year.Section 179 Bonus Depreciation is extended through 2019. Small and large businesses will be able to depreciate 50% of the cost of their equipment if their equipment has been put into service during 2015, 2016, and 2017. Bonus depreciation will phase itself out by going down to 40% in 2018, and 30% in 2019.Section 179 deductions can be used for tangible personal property purchased for your business that the IRS has determined will last more than one year. Types of assets include:
It is never too early to be focusing on your upcoming taxes, however, you can be too late. If you are a small business executive, you probably know about Section 179 and already know all the benefits of it. However, there have been some changes and updates made to Section 179 for this year and coming years. Section 179 is currently permanent at a $500,000 level until further notice. Businesses that exceed $2 million purchases of qualifying assets have the deduction phase-out dollar for dollar. They are completely eliminated above $2.5 million. In addition, the cap of Section 179 will be indexed to inflation at increments of 10,000 for years to come. What does this mean? This means that for taxable years beginning this year in 2017, the aggregate cost of any eligible 179 assets cannot exceed $510,000 and is reduced dollar for dollar if the cost of the property or asset exceeds $2,030,000. If you are looking to deduct the full price of your equipment from your 2017 taxes, the equipment must be purchased and in service by the end of the year.Section 179 Bonus Depreciation is extended through 2019. Small and large businesses will be able to depreciate 50% of the cost of their equipment if their equipment has been put into service during 2015, 2016, and 2017. Bonus depreciation will phase itself out by going down to 40% in 2018, and 30% in 2019.Section 179 deductions can be used for tangible personal property purchased for your business that the IRS has determined will last more than one year. Types of assets include:
Computers
Software
Office furniture
Business Equipment
Machinery
Business Vehicles (weighing more than 6,000 pounds)