If you are looking for ways to reduce your tax liability, Section 179 of the IRS Tax Code allows businesses to write off the purchase price of any qualifying equipment or software in the year it was purchased or financed, letting you to deduct your new technology. When you purchase tangible, physical equipment or software by December 31st you may qualify for deductions this coming tax season.
Section 179: How and Why It Can Deduct Office Technology
To help small to mid-sized businesses, the US Congress enacted Section 179 to allow taxpayers to deduct the cost of the total purchased price, financed total, or qualifying lease of office technology when the property is purchased in the current calendar year.
If you would like to receive the deduction, the equipment must be used more than 50% of the time for business purposes. You can also take advantage of the benefits of Section 179 if you lease equipment with a qualifying finance agreement. Leased equipment must be subject to a $1 buyout at the lease end to qualify for the deduction.
Benefits For Your Business
The deduction covers the lease or purchase of new and used office equipment. The original goal of Section 179 was to provide tax relief for small to mid-sized businesses to encourage them to invest in themselves and contribute to the economy’s strength.
The major benefit of this code for leased equipment is that you can take the full deduction for your business, while only paying small installments. Tax savings can even exceed their first year’s payments, which means you can earn money with financed or properly leased equipment!
What to Take Away
Your business uses technology and office equipment to operate, and you are likely to make multiple equipment purchases throughout the year. Take advantage of Section 179 before the end of the year and invest in your business, now is the time to upgrade!
If you want help investing in your business and updating your office technology before the end-of-year deadline, contact us at IntegraServ.* We are here to help!
*IntegraServ and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.