06 Dec What is Section 179?
Section 179 of the IRS tax code allows businesses to fully write off the cost of certain equipment for the year it was purchased or leased. It is designed to incentivize small business owners to invest in the future of their businesses and keep them working with efficiency. However, some restrictions apply to the type of equipment covered under this program.
The maximum that can be written off in 2021 is $1,050,000.
The equipment must be put into use by the end of the year it was purchased.
Any software, equipment, or vehicles must be used for business reasons more than 50% of the time to qualify. The percentage of time the equipment is used for business reasons is the percentage that can be written off.
Used equipment is covered under Section 179 as long as it is new to the business that is claiming it.
Note that Section 179 deductions are not automatic. In order to receive the benefits, you must fill out Part 1 of IRS form 4562. It’s not too late to take advantage of Section 179 in 2021! For more information about how it can help your business, visit www.section179.org. Use their helpful calculator to see how much you can save by filing with Section 179.
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