Section 179 has increased the amount of benefits that equipment leasing already has to offer. For non-tax capital leases, small businesses can write off up to $500,000. For qualifying True Leases, the lease payment can be deducted on your taxes.
What is Section 179?
“Section 179 of the United States Internal Revenue Code (26 U.S.C. § 179), allows a taxpayer to elect to deduct the cost of certain types of property on their income taxes as an expense, rather than requiring the cost of the property to be capitalized and depreciated.”
How it Works
You need to qualify for the deduction by meeting the following requirements:
-It must be eligible property
-It must be acquired for business use
-It must have been acquired by purchase
-It cannot be land, a permanent structure, inventory, intangible property, property used outside of the United States, or an air conditioner / heating unit
To find out what property qualifies according to the IRS, click here.
What You Should Know
-There is a limit to the amount you can deduct each year. As of 2017, the annual limit is $500,000.
-You cannot deduct more in one year than your net taxable business income.
-The write-off works on an item by item basis, so you do not need to use all eligible property for the deduction if you don’t want to.
-Section 179 gives you the ability to write off the cost of the equipment in one go rather than little by little on a yearly basis.
Call and speak to one of our knowledgeable representatives to see how you can make the most out of your next equipment lease. Call (877) 814-6871 or click here to apply now.