One of the most efficient and popular tax breaks for small to midsize businesses is the Section 179 tax deduction, and if you’re not currently taking advantage of it, you should certainly consider doing so.
Here is how it is defined: Section 179 is an immediate expense deduction that business owners can take for purchases of depreciable business equipment instead of capitalizing and depreciating the asset.
For tax year 2021, the deduction limit is $1,050,000.
What is important to know is that the deduction is allowable for the taxable year in which the Section 179 property is placed in service. So, if you purchase the equipment in 2021, but are unable to use it until January, the deduction cannot be used in 2021.
One of the many advantages of the deduction is that it not only can be used for new and used equipment or machinery, but also it can be used for computers and “off the shelf” software. Other expenses that qualify for the deduction are: business vehicles weighing more than 6,000 lbs, office furniture, security systems, roofing, and HVAC improvements to commercial buildings, among others. The equipment must be a new purchase for your business.
Here at Acceptance Leasing and Financing Service, our recently updated website (www.acceptlease.com) provides an important tool under the Resources tab, “Tax Savings Calculator,” which can help you to estimate the tax savings that can be realized by the purchase and installment of business equipment.
Our website also provides a link to the IRS for more information.
We look forward to assisting you in financing your next piece of new or used equipment.
Acceptance Leasing and Financing Service, Inc. is located near Pittsburgh, PA. We are a team of professionals dedicated to working closely with you to obtain an approval at the best possible rate for you. Call us today at 412-262-3225.