The Section 179 deduction has long
been a valued friend to small and mid-sized business. Now Congress has made the
deduction permanent ($500,000 limit), removing some of the planning
frustrations of years past.
HOW DOES SECTION 179 WORK?
Section 179 is a tax deduction from the IRS tax code that allows you to deduct the full purchase price of qualifying equipment, either purchased or financed during the tax year.
WHAT ARE THE DEDUCTION LIMITATIONS?
Companies can expense up to a $500,000 deduction on new or used equipment. You can write off $500,000 for 2016, and the Section 179 maximum equipment purchase limit is $2,000,000 before a dollar-for-dollar phase-out begins.
The Bonus Depreciation works in conjunction with the Section 179 deduction. You can take your deduction right off the top, then go back and take depreciation off of what's left.
Note that we are not accountants. Information cited here comes from other financial services. Please be sure to consult with your own accounting or tax team on any of this information, including how you can take action.