Section 179 Means a Profitable 2017
The Section 179 deduction limit for 2017 is $500,000. This is a very healthy tax deduction, and means businesses can deduct the full cost of qualifying equipment from their 2017 taxes, up to $500,000. This can really matter to your bottom line at the end of the 2017 tax year.
However, to qualify for Section 179 for 2017, the equipment must be purchased and put into service by midnight 12/31/2017. Use Form 4562 to claim your deduction.
Section 179 Tax Deduction Limits for year 2017:
The Section 179 Deduction was $500,000 for tax year 2017. This means all businesses can deduct the full cost of qualifying equipment from their 2017 taxes, up to $500,000, with a "total equipment purchased in 2017" limit of $2,000,000.
Small and Medium Businesses Get a Tax Break
Section 179 was created to spur equipment spending by small and medium businesses that purchase anywhere from $2,000 to $2,000,000 worth of equipment. However, once the $2,000,000 limit is reached in 2017, the deduction decreases on a dollar for dollar basis (and vanishes once $2,500,000 worth of equipment is purchased.)
This makes it clearly a tax deduction for small and medium businesses.
About the limits
There’s also a time limit for Section 179. For any tax year, the equipment must be purchased and put into service from Jan 1 to 11:59pm, December 31. In other words, the entire calendar year.
A look towards the future
>Congress finally made the Tax Deduction limit of $500,000 permanent. This means businesses can stop worrying if it will be there in the future. However, whichever tax year you use Section 179, it’s effectiveness can be greatly increased by utilizing Crest Capital’s Section 179 Financing.
| Section 179 Deduction Limits for 2017 |
|---|
| Deduction Limit | $500,000 |
| Limit on Capital Purchases | $2,000,000 |
| Bonus Depreciation | 50% |
Qualifying Property for Section 179:
- Business equipment of all types including machinery, computers, office furniture, storage tanks, signage, and any other commercial equipment.
- Vehicles designed for commercial-use such as 9+ passenger seats, cargo area of at least 6', or fully enclosed driving compartment with no body section protruding more than 30" ahead of the windshield.
- Vehicles with 6,000+ pounds GVW (gross vehicle weight) qualify for Section 179 but are limited to a $25,000 deduction… basically certain heavy SUVs.
- Off-the-shelf software readily available for purchase by the general public with a non-exclusive license and not substantially modified… note, websites do not qualify.
- Storage facilities and/or structures utilized for agricultural / horticultural purposes (Small disclaimer: main buildings / plants / offices don't qualify. Think movable structures, grain silos, and the like.)
The equipment listed above need not be new – it can be used (but new to you). Almost any "portable" (non-permanently installed) piece of business equipment will likely qualify. If you have any questions on whether something you wish to lease or finance will qualify for Section 179, you can always ask us, or reference IRS Publication 946.
Tax Code Section 179 limits have been modified by various Stimulus Acts over recent years. For further detail, contact your tax adviser or visit www.irs.gov and reference Form 4562.
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