Section 179 Tax Deduction
Regardless of the size of your business, one of the most important tax codes you need to be familiar with is Section 179. It allows the deduction of leased equipment used for your business. According to the IRS, the Section 179 tax deduction limit as of January 1st 2014 is $25,000. Although, this is a sharp drop from last year’s limit, it still presents small businesses with the opportunity to deduct your equipment, technology, software, and vehicle purchases when it comes time to do your taxes.
25,000 Reasons To Understand Section 179
Last year, there was quite a bit of uncertainty regarding the Section 179 limit; it was discussed by Congress on several occasions and the IRS took a while to issue a final deduction limit. As it stands right now, the total 2014 deduction limit defaulted to the original limit of $25,000. Depending on the structure of your lease, you may be able to deduct the entire equipment cost (up to $25,000) or deduct your lease payments for the entirety of the term. Section 179 may be used with more than one piece of equipment, just so long as the total deduction amount does not exceed $25,000 in a calender year.
So, if you are in the market for new or used business equipment, talk to a financial expert at Atlas today. They will let you know if the equipment you want to buy meets the Section 179 eligibility requirements that are set forth by the IRS.
NOTE: Legislation Has Been Introduced To Increase the Limit
In order to stimulate our economy that is so dependent on the success of businesses like yours, some lawmakers have proposed a higher Section 179 deduction limit, along with a permanent extension of the tax provision, to help US businesses purchase more equipment, hire more workers and maintain a better bottom line. Be sure to bookmark this web page so that you can readily access the latest information about equipment expensing limits under Section 179.