Save on taxes utilizing Section 179

Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying software and/or equipment purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying software or equipment, you can deduct the full purchase price from your gross income. This incentive was created by the U.S. Government to encourage businesses to buy equipment and invest.
 
What does this mean for your business?
Customers that lease their equipment will be able to write off up to $500,000 of their purchases, while not having to pay the full amount this year. The obvious advantage to leasing or financing equipment and/or software and then taking the Section 179 Deduction is the fact that you can deduct the full amount of the equipment and/or software, without paying the full amount this year. The amount you save in taxes can actually exceed the payments, making this a very bottom-line friendly deduction (you are reading this correctly; in many cases, the deduction will actually be profit).

50% Bonus Depreciation will be extended through 2019. Businesses of all sizes will be able to depreciate 50 percent of the cost of equipment acquired and put in service during 2015, 2016 and 2017. Then bonus depreciation will phase down to 40 percent in 2018 and 30 percent in 2019.

What Sort of Equipment Qualifies in 2016?
Most tangible business equipment qualifies. Click here for qualifying property.

Section 179 can provide you with significant tax relief for this 2016 tax year, but equipment and software must be financed and in place by midnight December 31, 2016.

For more information, visit Section 179 or Leases and Section 179



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