What is Section 179?
The IRS allows businesses to deduct the full purchase price of “Qualifying Equipment” (see below) and software that you purchased during the tax year. No matter if you purchase equipment outright, or finance or lease it, you can deduct the full purchase price from your reported gross income!
What is “Qualifying Equipment” per IRS code?
Almost anything you would buy that is connected to technology that helps your business be productive.
- Equipment (machines, etc) purchased for business use
- “Off-the-Shelf” Software
- Office Furniture
- Office Equipment
- Property attached to your building that is not a structural component of the building (i.e: a printing press, large manufacturing tools and equipment)
- Tangible personal property used in business
- Partial Business Use (equipment that is purchased for business use and personal use: generally, your deduction will be based on the percentage of time you use the equipment for business purposes)
- Business Vehicles with a gross vehicle weight in excess of 6,000 lbs
Please keep in mind that to qualify for the Section 179 Deduction, the equipment must be purchased and put into service between January 1 and December 31 of the tax year you are claiming.
For further details about deduction limits, or inquires about what qualifies, visit www.section179.org, or contact your tax preparer.
2018 Deduction Limit = $1,000,000
This amount is good for new and used equipment, as well as off-the shelf software.
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.
Bonus Depreciation: 100% for 2018
Bonus Depreciation is taken after the Section 179 Spending Cap is reached. (Note: Bonus Depreciation is available for new equipment only.)
The IRS makes frequent changes to Section 179, so take advantage while it’s available. Most of what Custom Video Security offers is covered and deductible, so do your diligence and leverage your savings.