If You're looking to invest in new printing equipment, Section 179 could be the key to unlocking substantial tax savings. This powerful provision of the U.S. tax code allows businesses to deduct the full purchase price of qualifying equipment and software in the year it’s bought and placed into service. For business owners, this means more cash in hand and more room to grow.
What is Section 179?
Section 179 is designed to encourage businesses to invest in themselves by making it easier to purchase necessary equipment. Instead of depreciating the cost of equipment over several years, Section 179 allows for an immediate deduction, creating more opportunities for growth and expansion.
Key Benefits of Section 179
Immediate Deduction: Rather than spreading the deduction over years, businesses can write off the entire purchase price of qualifying equipment in the same year it's put into service.
Increased Cash Flow: Lowering Your taxable income directly reduces Your tax liability, freeing up cash to reinvest into Your business.
Incentivized Investment: Section 179 encourages businesses to purchase equipment that can fuel growth, making it a smart option for those looking to scale operations or improve efficiency.
Qualifying Purchases
Wondering what qualifies? Section 179 covers a wide range of business-related expenses, including:
Office furniture and equipment
Computers and off-the-shelf software
Machinery and production equipment (including printing machines and ancillary solutions like Your NEXT ROQ investment)
Certain vehicles (subject to restrictions)
Some property improvements (e.g., roofs, HVAC, fire protection, and security systems)
Limits and Restrictions for 2024
While Section 179 is an excellent opportunity, there are some important limits and rules to be aware of for the 2024 tax year:
Maximum Deduction: $1,220,000
Spending Cap: $3,050,000 (the deduction phases out dollar-for-dollar above this amount)
Vehicle Deduction: $30,500 for heavy vehicles (between 6,001 and 14,000 pounds GVWR)
How to Claim Your Section 179 Deduction
To take advantage of Section 179, follow these simple steps:
Purchase and use qualifying equipment between January 1 and December 31 of the tax year.
File IRS Form 4562 when submitting Your taxes to claim the deduction.
Consult a tax professional to ensure all deductions are maximized and compliant with tax laws.
Key Considerations
Section 179 is particularly beneficial for small and medium-sized businesses—larger companies may surpass the spending cap.
The deduction can be combined with bonus depreciation, further reducing Your tax burden.
Always consult with a tax professional to ensure You're maximizing Your tax savings while adhering to IRS guidelines.
Who Benefits Most from Section 179?
Most businesses that purchase, lease, or finance equipment during the year can benefit, provided their total spending is below the $3,050,000 cap. Whether You're buying machinery, upgrading office equipment, or improving Your workspace, Section 179 could offer substantial savings.
How to Maximize Your Section 179 Benefits
Plan Purchases Strategically: Purchase qualifying equipment before year-end to take advantage of the deduction.
Understand Qualifying Property: Familiarize Yourself with eligible purchases, from software to heavy vehicles and certain property improvements.
Combine with Bonus Depreciation: Max out Section 179 and use bonus depreciation for even greater savings.
Take Advantage of Vehicle Deductions: Heavy vehicles (6,000-14,000 lbs GVWR) have a deduction limit of $30,500 in 2024.
Keep Detailed Records: Accurate documentation of Your purchases and business use is essential to support Your deduction claims.
Click here to download Your Free eBook from First Citizens and start planning your business’s financial future.
Take the Next Step
Leveraging Section 179 can be a game-changer for Your business, offering significant tax savings and allowing You to reinvest in growth and innovation. As tax laws can be complex, it's always a good idea to consult a tax professional to ensure You're taking full advantage of this opportunity (*and by no means is this blog intended to be any form of tax advice).
READY to explore how You can maximize Section 179 for Your business? Click below to speak with Your dedicated ROQ Solutions Partner today for personalized insights on how to utilize this powerful deduction and learn how our cutting-edge automation solutions can take Your business to the next-level success You dream about and deserve.
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