“Essentially, 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. That means that if you buy (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.”
Section 179 Increased to One Million for 2018 Jan 2, 2018 – With the passage and signing into law of H.R.1, aka, The Tax Cuts and Jobs Act, the deduction limit for Section 179 increases to $1,000,000 for 2018 and beyond. The limit on equipment purchases likewise has increased to $2.5 million. Further, the bonus depreciation is 100% and is made retroactive to 9/27/2017 and good through 2022. The bonus depreciation also now includes used equipment.
See fully updated 2018 Section 179 Calculator to see how this tax deduction affects your company.
Please consult with your tax professional on eligibility and qualification requirements.