Growing your business starts with finding the best practices for routine tasks, such as paying business fees and filing taxes. You have to be aware of beneficial deductions like Section 179 in order to utilize these in a timely manner. Section 179 is a tax deduction that applies to equipment and machinery depreciation to the tune of $1, 050,00 in 2021, with a total equipment purchase value of $2.62M. Find out how this deduction works to reduce expenditures for small-to-medium businesses.
What is Section 179
As of 2018, the Internal Revenue Service has referred to Section 179 as a way to reduce expenditures using equipment and machinery depreciation. This is applicable to small to medium businesses and corporations, including farming entities that file taxes. Equipment which qualifies for Section 179 deductions includes but is not limited to:
- Equipment and machinery purchased for business use (machine tools, plastics, printing presses, woodworking, etc.)
- Business vehicles exceeding 6,000 lbs gross weight
- Certain commercial property improves such as security systems, HVAC, and property preservation improvements
- Office equipment
- And more.
If you are looking to make upgrades to your company’s property or assets, Section 179 serves as an aggressive tax incentive that is applicable in many of these instances. The purchase of new equipment is eligible, allowing you to offset a considerable amount of money on this costly expense.
Advantages of New Equipment
Businesses with new equipment can take advantage of a sizable deduction here. The limits are substantial and will cover most machinery with the phase-out limit increased to $2.62 million. Other reasons why you would want to invest in new equipment include improved speed and dependability. The newer machinery may also come with applicable warranties to help protect against financial loss due to damage and wear and tear. You hope to be able to add capacity and reduce the margin of error when investing in new machinery as well.
Grow Smarter With Business Tax Savings
If you are ready to see more financial benefit from new equipment, let us assist you. We give you the tools and resources to set your company on the financial fast track to success. In addition, our agents can work with you to identify the best way to handle your tax deductions, including Section 179 to increase cost savings for your company.
Along with equipment leasing, we also offer comprehensive solutions specific to the industrial, transportation, and construction industries. We know a thing or two about buying and selling equipment and machinery in these industries, and are more than happy to help you complete your next deal.
To learn more about scaling your business with business tax savings, contact ENGS Commercial Financial Company.