logo outerglow

Section 179 Tax Deduction on New & Used Equipment
The Equipment Purchase Advantage of Section 179

Are you aware of the Section 179 tax deduction? If you’ve had your eye on buying or leasing a piece of equipment – new or used – then you might want to take advantage of Section 179 and purchase it before the end of the year. Here’s why.

With Section 179, you can write off up to $1,000,000 for a new or used equipment purchase in 2018 – rather than incrementally writing it off year after year due to depreciation. With the old tax depreciation model, your company receives a slower recovery of the equipment cost. Because Section 179 can be applied as a lump sum, you’ll have money that would have been earmarked for that cost recovery over a period of years immediately, giving you greater monetary freedom in ensuing years to use in your business. Once the Section 179 Spending Cap is reached, a 100% bonus depreciation kicks in for both new and used equipment – a big win for many businesses!

Shoppas 2018 section 179

Looking At The Section 179 Numbers

Designed by the government to advance the economy – as well as assisting qualifying businesses – Section 179 can help businesses of all sizes with sought-after tax relief. Some numbers to keep in mind include:

$1,000,000 – 2018 Deduction Limit
$2,500,000 – 2018 Spending Cap on Equipment Purchases
100% - 2018 Bonus Depreciation

In simple terms, forklifts or equipment financed or leased and put into service between Jan. 1, 2018 and the end of the day on Dec. 31, 2018 can be written off at $1,000,000. What this means in actual terms is that to be eligible, any equipment you might be planning to write off with the Section 179 deduction must be up and running and in service by end of business on Dec. 31 – if your people need training, you’ll need to take this time frame into consideration! Don’t forget that any equipment you purchase or lease and deduct under Section 179 must be used for business purposes more than 50% of the time in order to qualify.

Leasing and Financing

Parts of Section 179 apply specifically to leasing and financing. Some businesses are discovering that tax savings realized with Section 179 may exceed cash outlay for the year when the full amount spent on leased or financed equipment can be deducted even if the full equipment purchase price is not paid up front.

If you are planning to finance or lease anyway, it makes sense to explore your options under Section 179.

Time Is Short

Remember that any new or used equipment you plan on deducting under Section 179 must be in use by end of day Dec. 31, 2018. Considering holidays and winter weather, be sure and take into consideration any training time you may need for your operators on a new piece of equipment.

Not only that, but Shoppa’s has some awesome end-of-year specials that you’ll want to check out so you can take advantage of great prices, while saving with Section 179.

Each company’s tax situation is unique. Be sure and consult with your tax professional before purchasing. For more details visit www.irs.gov.