With 2018 coming to a close, there isn’t much time left to upgrade your equipment to take advantage of a significant tax break. Section 179 was signed in December 2017, allowing businesses to increase deductions from equipment upgrades valued up to $1 million within a single calendar year.
This encourages investment toward long-term improvements – with qualifying leased or owned equipment – allowing the full purchase price to be deducted from your gross income; this differs from normal equipment depreciation. Additionally, you have the option to apply the tax break on each individual item or across all equipment, depending on which path proves to be the most financially sound for your company.
Cheat Sheet:
- 2018 Depreciation Limit = $1,000,000
- Outright purchases & financed purchases qualify.
- Machines, machine control, software & survey equipment all qualify.
- 2018 Spending Cap on Equipment Purchases = $2,500,000.
- Bonus Depreciation = 100%
Deductions only apply to equipment delivered before January 1, 2019.
Savings Example
New/Used Equipment Purchase Tax Year 2018
Cost of Annual Equipment Purchase $1,500,000
Section 179 Deduction $1,000,000
Tax Rate 32%
Tax Savings Using Section 179 $320,000
Time is running out so take advantage of this deduction today!
*Papé does not offer any tax advice, and this information is provided simply as a suggested purchase savings method. Please consult your tax adviser on all Section 179 deduction and bonus depreciation details. Read more about the Section 179 deduction at http://www.section179.org
