The Section 179 Tax Deduction is a direct boost to small businesses. Stay competitive by purchasing needed fleet vehicles, then write off the full amount from your taxes. Your business can even finance the fleet vehicles and still write off the entire amount up to $500,000.
What is Section 179?
Essentially, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment (INCLUDING FLEET VEHICLES) and/or software purchased or financed during the tax year.
That means if you finance a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. This deduction is not automatic and must be elected. In order to elect to take the deduction, you’ll need to fill out Part 1 of IRS form 4562.
WHAT PROPERTY QUALIFIES?
You qualify for the Section 179 deduction if you finance long-term, tangible personal property that you use in your business more than 50% of the time.
What does this mean exactly?
WRITE OFF 100% OF YOUR BUSINESS VEHICLES IN THE FIRST YEAR OF PURCHASE. Or spread out over time, what ever your tax accountant deems is best for you.
Annual Deduction Limit – There is a $500,000 limit on the total amount of business property expenses you can deduct each year under Section 179. When first enacted, the Section 179 annual limit was set at a relatively modest $10,000. Over the years, Congress kept raising the limit in an effort to help small businesses during tough economic times.
*Talk to your CPA or Tax Accountant for current rules and regulations!