If you're a small business owner, taxes might be the last thing you want to deal with, but here's some good news: you can lower your taxes and save money with the Section 179 Tax Deduction.
How Does Section 179 Work?
Instead of writing off the cost of property over several years, Section 179 allows businesses to deduct the full cost of qualifying items—like equipment, machinery, or vehicles—in the year they purchase them, rather than depreciating the cost over several years. By reducing your taxable income for the year, this deduction helps you save money on your taxes right away.
Key Takeaways about Section 179:
- Immediate Deduction: Deduct the full cost of qualifying property (e.g., equipment, office furniture, vehicles) in the year it’s purchased.
- Taxable Income Reduction: It reduces your taxable income, meaning you pay less in taxes that year.
- Annual Deduction Limits: For 2024, businesses can deduct up to $1,220,000 for qualifying purchases. If total purchases exceed $3,050,000, the deduction begins to decrease
- Business Use: The property must be used more than 50% for business purposes to qualify.
- Bonus Depreciation: In addition to Section 179, you can take advantage of 60% Bonus Depreciation for both new and used qualifying property purchased in 2024, allowing for even more deductions
To Learn More About Section 179:
For more detailed information on Section 179, visit Section 179 Tax Deduction Overview, or consult a tax professional for advice specific to your business needs.