Monday, November 13, 2017

Can you benefit from Section 179

Section 179 and how it can save your company a significant amount of money if you’re looking at any technology purchases in the near future. There is a little less than 2 months left in the year to take advantage of the Section 179 Deduction for 2017. We’ve seen a large uptick in activity with clients seeking to take advantage of this government “gift” and literally locking in thousands of dollars in savings before expiring at year end. For example, a $200,000 purchase this year could actually only cost $130,000 after the tax savings!

If you’re looking to deduct the full price of the equipment from your 2017 taxes, it must be purchased and put into service before year end.

 What is Section 179:

  •  Section 179 Explained: This IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software leased/financed during the 2017 tax year. That means that if a corporation leases/finances a piece of qualifying equipment, they can deduct the FULL PURCHASE PRICE (The deduction limit for 2017 is $500,000) from their gross income. It's an incentive created by the U.S. government to encourage businesses to lease/finance equipment and invest in themselves.

Below are a couple of examples of how much of an impact this deduction can have on your bottom-line:


 2017 Section 179: Example Calculation
Equipment Purchase Amount:
$650,000
Section 179 Deduction
$500,000
50% Bonus First Yr. Depreciation
$75,000
(50% CAP in 2017)
Normal First Year Depreciation
$15,000
Total First Year Deduction
$590,000
Cash Savings on your Purchase
$206,500
(Assuming a 35% tax bracket)
Actual Cost of Equipment
$443,500
(After Tax Savings)
2017 Section 179: Example Calculation
Equipment Purchase Amount:
$200,000
Section 179 Deduction
$200,000
50% Bonus First Yr. Depreciation
$0
(50% CAP in 2017)
Normal First Year Depreciation
$0
Total First Year Deduction
$200,000
Cash Savings on your Purchase
$70,000
(Assuming a 35% tax bracket)
Actual Cost of Equipment
$130,000
(After Tax Savings)

Please let me know if we can help you in anyway, 

Robert Blake
866-391-1566