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 purchased or financed during the tax year. That means that if you buy a piece of qualifying Kentucky Gauge 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.
Here’s How Section 179 works:
In years past, when your business bought qualifying equipment, it typically wrote it off a little at a time through depreciation. In other words, if your company spends $50,000 on a machine, it gets to write off (say) $10,000 a year for five years (these numbers are only meant to give you an example).
Now, while it’s true that this is better than no write-off at all, most business owners would really prefer to write off the entire equipment purchase price for the year they buy it.
And that’s exactly what Section 179 does – it allows your business to write off the entire purchase price of qualifying equipment for the current tax year.
This has made a big difference for many companies (and the economy in general.) Businesses have used Section 179 to purchase needed equipment right now, instead of waiting. For most small businesses, the entire cost of qualifying equipment can be written-off on the 2020 tax return (up to $1,040,000).
Who Qualifies for Section 179?
All businesses that purchase, finance, and/or lease new or used business equipment during the tax year 2020 should qualify for the Section 179 Deduction (assuming they spend less than $3,630,000).
Use Section 179 to purchase much-needed equipment right now! Why wait?! Contact us now!
Let’s look at an example
Let’s say you purchase a piece of equipment for $20,000. If you’re in the 35% tax bracket, the true equipment cost is only $13,000 after the Section 179 tax deduction. That’s a savings of $7,000!
That’s an extra $7,000 in your pocket just for purchasing equipment that you need in order to stay competitive and meet production goals.
Try it out for yourself. Do you already have a quote from one of our sales representatives? Check out the Section 179 calculator to see how much you can save.
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.
Manufacturing is getting more and more competitive. In order to stay profitable, you need to figure out how to cut costs, reduce rework, eliminate scrap, improve your quality control, and increase throughput. Kentucky Gauge is the answer.