Time is running out for the Section 179 Tax Deduction for your business!
end of the year is approaching and you might be thinking of buying a
new work vehicle for your small business. The great thing is if you buy
one before 2017, it could be as good for your bottom line as it is for
your business. Below is a list of frequently asked questions.Frequently Asked QuestionsQ. What is the Section 179 deduction?
Section 179 of the IRS tax code was designed as an incentive for
business owners to invest in their businesses and the economy by
purchasing equipment. It allows taxpayers to elect to deduct the full
purchase cost of certain types of property (up to $25,000) from their
federal taxes for the year the property was purchased.
Q. Which property qualifies under Section 179?
Most business equipment qualifies for the Section 179 deduction. This
includes tangible goods like vehicles, machinery, computers, software,
and office furniture. The IRS website has a full list of equipment that
qualifies for the Section 179 Tax Deduction. To qualify more than 50% of
the property's use must be in the service of a trade or business.Q. How much can you deduct?
The amount you can deduct is generally equal to the purchase price of
qualifying property up to $25,000. There are some limitations, including
a $25,000 limit on the amount a small business owner can elect to
deduct for the purchase of certain sports utility vehicles. There is
also a limitation for businesses that purchase more than $200,000 in
qualified equipment. The IRS website has a more detailed explanation
of deduction limits.
Q.Will the 2016 Section 179 dollar limitations change?
Lawmakers are considering an increase to the Section 179 dollar
limitation, potentially retroactive to January 1, 2015. Keep an eye on
our channels for possible updates.
*The information provided
here is intended as a general overview of the Section 179 Deduction. You
should always consult with a tax professional on business tax
deductions. Ends 12/31/2016.