entrepreneur doing business accounting

About the Section 179 Tax Deduction.

Everything you need to know about Section 179.

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 a Section 179 FAQ page. It’s a good idea to become familiar with Section 179 so you can plan for your company’s future as it relates to capital equipment purchases.

female business owner using a tablet

Current Section 179 deduction limit.

The current Section 179 tax 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 Section 179 tax calculator to see how much your tax savings can be.

How do I get the tax 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 for the Section 179 deduction, therefore you should consult with your accountant or tax professional prior to making any purchases. We created a list of equipment that qualifies for Section 179 to help guide you in the right direction.

restaurant owners doing their business taxes
section 179 tax deduction infographic from balboa capital

Section 179 infographic.

Balboa Capital created this infographic to present you with a visual overview of the Section 179 tax deduction. It features the latest deduction and phase-out amounts, common types of qualifying equipment, and more. Our Section 179 infographic is free to download and share.

Use our free Section 179 calculator. 

CALCULATE NOW