2021 Section 179 Tax Deduction For Small Businesses

What is the Section 179 Deduction?

Most people think the Section 179 deduction is some mysterious or complicated tax code. It really isn’t, as you will see below.

Essentially, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year.

 

That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. It’s an incentive created by the U.S. government to encourage businesses to buy equipment and invest in themselves.

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Can A Section 179 Tax Deduction Benefit Me?

By taking advantage of these write-off's for your new finishing equipment from Superfici America, you may qualify to receive a significant amount of money back that can be reinvested into your business. Compared to years’ past, you may be able to write off the entire amount of your qualifying equipment up to $1,050,000. Additionally, businesses purchasing qualifying equipment may be eligible for an additional allowance called Bonus Depreciation. According to www.section179.org, the Bonus Appreciation Allowance can be useful to businesses spending more than the Section 179 spending cap of $2,620,000 on new capital equipment. In most cases, Section 179 is taken first and followed by Bonus Depreciation.

Will I Qualify For The Section 179 Tax Deduction?

According to the website www.section179.org:

  • All businesses that purchase, finance, and/or lease new or used business equipment during tax year 2021 should qualify for the Section 179 Deduction (assuming they spend less than $3,670,000);

  • Most tangible goods used by American businesses, including “off-the-shelf” software and business-use vehicles (restrictions apply) qualify for the Section 179 Deduction;

  • For basic guidelines on what property is covered under the Section 179 tax code, please refer to this list of qualifying equipment. Also, to qualify for the Section 179 Deduction, the equipment and/or software purchased or financed must be placed into service between January 1, 2021 and December 31, 2021;

  • For 2021, $1,050,000 of assets can be expensed; that amount phases out dollar for dollar when $2,620,000 of qualified assets are placed in service;

  • To qualify, the equipment and/or software must be used for business purposes more than 50% of the time.

Example Calculation Using the Section 179 Calculator

Using a $75,000 equipment cost for a sample calculation shows how taking advantage of the Section 179 Deduction can significantly lower the true cost of the equipment purchased, financed or leased. In our example, $75,000 in equipment purchased has a true cost of $48,750. That’s $26,250 saved. Would you like an extra “25 grand-plus” this year on equipment you needed anyway?

In order to qualify for the Section 179 Deduction, the equipment must be purchased, financed or leased equipment and put into service by December 31 of this year! https://www.section179.org/section_179_calculator/

How Do I Get My Section 179 Deduction?

Contact Superfici America at 866-359-0831, and let our team help you make the most of your future investment. There is also a helpful deduction calculator tool you can use if you want to crunch the numbers on your own. Lastly, when preparing your taxes you’ll submit IRS form 4562, which will ask you to describe your equipment and declare its cost.