Section 179 of the US Tax Code and what it means for your business
Most people think the Section 179 tax deduction is some mysterious or complicated tax code. It really isn’t and it can help you add new equipment to your shop and increase production. Of course, the equipment must be purchased and put into service before the year ends which means December 31st, 2024 and no later.
Essentially, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment purchased or financed during the tax year. When you buy or lease printing equipment, you can deduct the full purchase price from your gross income. It’s an incentive created by the U.S. government to encourage businesses to reinvest in themselves.
Section 179 Deduction Limits for 2024
The Section 179 deduction limit for 2024 is $1,220,000. Your company can deduct the full cost of qualifying equipment, up to $3.05M from your 2024 taxable income. This deduction is good until you reach $3.05 million in purchases for the year.
Section 179 is Meant for Small and Mid-Sized Companies
Section 179 helps small and mid-sized companies reinvest in their businesses. The full $1.22M deduction can be claimed up to the $3.05M equipment purchases limit. Once that number is reached, the Section 179 deduction decreases dollar-for-dollar and reaches zero once $3,050,000 worth of equipment is purchased/financed.
About the Section 179 Deadline
The Section 179 deduction has proven wildly popular with small and mid-sized companies. But there is a deadline. The equipment must be purchased/financed and put into service by 11:59 pm on December 31st, 2024.
Bonus Depreciation
Bonus depreciation is offered some years, and some years it isn’t. Right now in 2024, it’s being offered at 60%.
We recommend that you plan ahead and order your equipment soon so you can take delivery by the end of the year. Contact us for samples, demos, quotes and for answers to any questions. Of course, we also recommend that you consult with your financial advisor or tax attorney.
