Section 179 Savings

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Small Businesses Need to Act Fast to Get This Huge Present

Many small business owners are generally familiar with some of the small business tax deductions that can help you save money at tax time.   With the holiday season about to kick into full force don’t forget about the Section 179 deduction and how it can greatly benefit your small business.  This tax break for small businesses is intended to make it more affordable for small companies to buy business equipment, such as office furniture, vehicles, computers, equipment and other tangible capital investments, by allowing businesses to deduct up to $500,000 per year in qualifying business equipment purchases from their taxable income.  This is one of the most immediate, tangible things most small businesses do in some form.

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So how can you put Section 179 to work for your small business?

Do some last-minute shopping. There’s still time to make purchases that qualify for the Section 179 deduction, but only if you put them into service by the end of the year.  The deduction works like this: If a company has a $90,000 profit and decides to spend $40,000 of it on new lasers or UV printers, the company would normally write off the cost of the equipment gradually, deducting a portion of it each year over the span of the equipment’s useful life. But Section 179 allows the business to deduct the entire $40,000 cost at once in the year the equipment is purchased, reducing the company’s taxable profit to $30,000. (The deduction cannot exceed a business’s total net income.)

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Reinvest in your business. By taking the Section 179 deduction, you can free cash that you can put into new equipment your company needs to keep your business current.  Wouldn’t you rather invest that money into your business than pay taxes on it?

By taking advantage of the Section 179 deduction, it allows your company to retain that money so that you can reinvest it immediately in 2018.  Even if you do not need to purchase a $50,000 piece of equipment, taking Section 179 can still improve cash flow. It opens up immediate opportunity to have money today rather than five years from now, or to have a deduction today rather than over five years.

Calculate Your Savings!

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The Section 179 Deduction has a real impact on your equipment costs.  Click on the link below to use a calculator that will ehlp you estimate your tax savings.  Simply enter in the purchase price of your equipment and let the calculator take care of the rest.

Section 179 Deduction Calculator 

If you use the calculator, take note of the savings on your tax obligation. Many people find that, if they lease or finance their Section 179 qualified equipment, the tax savings actually exceed the first year’s payments on the equipment (making buying equipment profitable for the current tax year). This is perfectly legal, and a good example of the incentive that Section 179 provides small and medium businesses.