Tax Benefits of Purchasing Before the End of the Year
September 30, 2024
The PRO’s Guide to the Section 179 Tax Deduction
October 14, 2024
Been thinking about purchasing some new equipment for your business or making property updates at your headquarters? Doing it before the end of the year has its benefits. You not only will reap the rewards of the purchase but also get tax benefits if you take advantage of the Section 179 tax deduction.
If you’re new to Section 179, we’ve got a brief overview you can reference. In our infographic below, we answer some of the common questions and share the key things you should know about this upfront tax break.
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The Section 179 Tax Deduction: Key Things to Know
What is Section 179?
Section 179 is an immediate expense tax deduction that allows you to deduct all or part of the cost of depreciable machinery or equipment purchased or financed for business use and put into service before December 31, 2024. It is an alternative to capitalizing and depreciating the asset over a period of time.
What is the deduction limit for 2024?
The Section 179 deduction limit for 2024 qualifying purchases is $1,220,000. The phase-out threshold is $3,050,000, which is the maximum amount that you can spend on equipment before the Section 179 deduction available to your company begins to be reduced on a dollar-for-dollar basis.
What property is eligible for purchase under Section 179?
Examples of new or used business property that qualify for the Section 179 tax deduction include machinery, office furniture and certain software. It also includes qualified real property improvements to roofs, HVAC, fire alarm and security systems.
How can the Section 179 tax deduction be claimed?
Section 179 is not automatic and must be elected. If you want to elect to take the deduction, fill out IRS form 4562. The completed form should be attached to your tax return.
What if I have more questions?
If you have any additional accounting or tax questions, it’s always best to consult your accountant or tax professional for the most current and accurate information. It’s recommended to confirm with a professional that a purchase will qualify for Section 179 before you proceed with the purchase.
