If you are considering purchasing or leasing new or used equipment or software before the end of the year, you need to know about important changes to the Section 179 Tax Deduction and how it can benefit your business.
We’re no tax experts, so the information contained in this blog comes from section179.org, the official website of Section 179. It’s a free resource that answers Section 179 questions and offers tools and information on how businesses can benefit from the Section 179 Tax Deduction. We also strongly recommend you consult with your accountant, tax professional or finance department to discuss Section 179.
What is the Section 179 Deduction?
Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. So, if you buy (or lease) a piece of qualifying equipment, you can deduct the full purchase price from your gross income for the current tax year. It’s an incentive created by the U.S. government to encourage small businesses to buy equipment and invest in themselves. (Yay!)
So, What’s New in 2019?
The deduction limit is now $1,000,000 (one million dollars!) for 2019 and beyond, while the limit on equipment purchases remains at $2.5 million.
This deduction is good on new and used equipment, as well as off-the-shelf software. To take the deduction for tax year 2019, the equipment must be financed or purchased and put into service between January 1, 2019 and the end of the day on December 31, 2019.
Bonus Depreciation has increased from 50% to 100%.
Bonus depreciation has increased from 50% to 100% for qualified property acquired and placed in service after September 27, 2017 and before January 1, 2023. Bonus Depreciation is generally taken after the Section 179 spending cap is reached. The Bonus Depreciation is available for both new and used equipment. Get more details on Bonus Depreciation from the IRS.
Now Let’s Look at Some Examples of How You Could Save
The table below shows some examples of how much you could save from Section 179 when purchasing EFI software or inkjet printing technology in 2019*.
Of course, your savings may vary. Other important considerations will be a single versus multiple asset purchase and individual state tax laws. Use the Section 179 Calculator to estimate your tax savings now.
To take advantage of these savings, purchases must be made by December 31, 2019. So, if you’re considering adding inkjet printing or software technology to your print business, don’t wait. Watch a video on the Section 179 Tax Deduction and how it can benefit your business, or connect with an EFI representative now by calling 1-800-875-7117.
*Based on figures from http://section179.org and assuming a 35% tax bracket. To learn more, we encourage you to consult your accountant or finance department. Review the website dedicated to this bill at www.section179.org or visit www.irs.gov for complete information.
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