Attention small business owners! Have you bought or financed any new or used equipment for your business in 2023? Do you plan on adding to your business fleet before the end of the year?
If you’ve answered “yes” to either of these questions, then you should consider leveraging Section 179 Tax Deductions. This IRS tax code allows small and medium businesses to deduct the full purchase price of qualifying equipment purchased or financed during the tax year.
Section 179 Explained
In the past, if you bought equipment for your business, you would typically write it off on taxes a little bit at a time through depreciation. Section 179 allows businesses to write off the total purchase price of new and used qualified equipment for the current tax year.
Here are the guidelines for the 2023 tax year:
Deduction Limit = $1,160,000
This deduction is good on new and used equipment, as well as off-the-shelf software. To take the deduction for tax year 2023, the equipment must be financed or purchased and put into service between January 1, 2023, and the end of the day on December 31, 2023.
Spending Cap on equipment purchases = $4,050,000
This is the maximum amount that can be spent on equipment before the entire deduction goes away. The deduction begins to phase out on a dollar-for-dollar basis after $2,890,000 is spent by a given business making this a true small and medium-sized business deduction.
Bonus Depreciation = 80%
Bonus Depreciation is generally taken after the Section 179 Spending Cap is reached.
Who Qualifies? All businesses that purchase, finance, and/or lease new or used business equipment during tax year 2023. Read here for more information on qualified financing.
Thoughts from our Vice president
Nick Ferree, the Vice President of Equipment Source Inc., had this to say about Section 179:
“We have Alaska-made ESI and also JCB equipment ready to purchase in Fairbanks and Anchorage. We also have clinical-grade air purifiers that are a necessary piece of workplace equipment. Our highly qualified sales team is ready to help you find the equipment that will fit your business needs.”
Utilize Tax Deduction Calculator
Section 179 could be highly profitable to your business, and it’s in your business’s best interest to learn as much as possible. Check out the Tax Deduction Calculator on Section179.org to get an estimate of how much money you could save.
Act now, and don’t lose out on your savings!
Contact us: Let our sales team help you find the right equipment to add to your fleet before the end of the year.
***Disclaimer*** A professional advisor should be consulted before implementing any of the options presented. No content should be construed as legal or tax advice. Always consult with an attorney or tax professional regarding your specific legal or tax situation.