How to Write Off Equipment Purchases for Your Business
How to Write Off Equipment Purchases for Your Business: A Guide to Section 179
Understanding Section 179 and How It Saves Your Business Money
If you're purchasing equipment for your business, Section 179 of the tax code offers a powerful way to reduce your tax burden. This guide explains how you can deduct the full cost of qualifying equipment purchases in the same year, keeping more money in your business.
What is Section 179?
Section 179 allows businesses to deduct the full purchase price of eligible equipment from their taxable income. Rather than depreciating the asset over several years, this provision provides immediate tax relief.
Key Benefits of Section 179:
- Deduct up to $1,200,000 in equipment costs for this tax year.
- The deduction begins to phase out at $3,000,000 in total equipment purchases.
- Applies to new and used equipment, including forklifts, trucks, generators, heavy machinery, and more.
- Equipment must be purchased and in service before the tax year ends.
How Does Section 179 Work?
- Purchase Qualifying Equipment – Ensure that the equipment meets IRS guidelines and is used primarily for business.
- Put the Equipment into Service – It must be in operational use before the tax year ends.
- Claim the Deduction – Report the deduction on IRS Form 4562 when filing your taxes.
Example of Section 179 Tax Savings
Consider a business that purchases a forklift for $50,000. By applying Section 179, they can deduct the full cost from taxable income. If they are in a 30% tax bracket, they could save $15,000 in taxes, lowering the effective cost of the equipment to $35,000.
For larger equipment purchases, such as a $600,000 loader, Section 179 allows the company to deduct the full amount up to the limit, with bonus depreciation potentially covering the remaining balance.
Who Qualifies for Section 179?
Section 179 is designed for businesses of all sizes that purchase equipment primarily for business use. Eligible businesses include:
- Construction companies
- Warehouses and logistics businesses
- Manufacturing firms
- Agriculture and farming operations
- Any business that relies on machinery or vehicles for operations
Maximize Your Tax Savings with Bonus Depreciation
If your equipment investment exceeds the $1,200,000 deduction limit, you may still benefit from bonus depreciation, which allows you to deduct additional costs in the first year. This is especially beneficial for businesses making large capital investments.
Use Our Section 179 Tax Savings Calculator
Want to see how much you could save? Use our Equipment Tax Savings Calculator below to estimate your potential tax deduction.
Financing & Section 179: Get the Best of Both Worlds
Even if you finance your equipment purchase, you may still be able to deduct the full cost under Section 179. This means you can spread payments over time while reducing your tax liability now, making equipment upgrades more affordable.
Act Now: The Section 179 Deadline is Approaching
To take advantage of Section 179, your equipment must be purchased and put into service before the end of the tax year. Waiting could mean missing out on substantial tax savings.
Consult a Tax Professional
While Section 179 offers significant benefits, tax laws can be complex. It’s always best to consult a tax professional to ensure you maximize your deductions and comply with IRS regulations.
Start Saving Today
Ready to take advantage of Section 179? Use our calculator to see how much you can save and invest in the equipment your business needs.
📞 Call us: 833-856-2800
📧 Email us: sales@liftprosupply.com
🌍 Visit: www.liftprosupply.com
Learn more about Section 179 from the official IRS website.