business owner learning about section 179

Section 179: Everything you need to know about this tax deduction.

Section 179 overview.

If you own a business, Section 179 one of the most important tax codes you need to be familiar with. It lets you deduct all (or part) of the cost of equipment that is purchased or leased and put into place before the end of the year. The only stipulation is that the equipment needs to qualify for deduction. Balboa Capital has all the information you need to know, including an FAQ page. It’s a good idea to become familiar with this tax incentive so you can plan for your company’s future as it relates to capital equipment purchases.

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Current Section 179 limit.

The current deduction limit is $1,000,000 on qualifying equipment, and the limit on equipment purchases has increased to $2.5 million. This was enacted through the Tax Cuts and Jobs Act (H.R.1) that was signed into law. In addition, the bill allows businesses to depreciate 100% of the cost of eligible equipment that is bought or leased from September 27, 2017 through 2022  Bonus depreciation now applies to used equipment. Use our helpful tax deduction calculator to see how much your tax savings can be.

How do I get the Section 179 deduction?

Section 179 is a tax deduction for businesses that have placed new or used equipment into service within the year that they purchased or leased. 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. Make sure this completed form is attached to your tax return. Not all types of equipment qualify, therefore you should consult with your accountant or tax professional prior to making any purchases. We created a Section 179 property list to help guide you in the right direction.

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section 179 infographic

Section 179 infographic.

Balboa Capital created this infographic to present you with a visual overview of this business-friendly tax deduction. It features the latest deduction and phase-out amounts, common types of qualifying property, and more. This infographic is free to download and share.

Use our free Section 179 tax deduction calculator.