Small business owners rejoice! With the Section 179 deduction, you can save big. Business owners who acquire equipment for their business, including medical equipment — like EKG machines and spirometers — are eligible for a section 179 tax savings.
What is Section 179?
As of January 1, 2016, the “Protecting Americans from Tax Hikes Act of 2015” (PATH Act) was passed by both the U.S. House and Senate and signed into law. This bill expanded the Section 129 deduction limit to $500,000. This tax savings allows a small business to obtain an enhanced deduction on equipment and software purchased or financed during the single tax year. In 2016, the spending cap on equipment purchases is $2,000,000, making Section 179 a true incentive for small business.
What else is new for 2016?
The 50% Bonus Depreciation will extend through 2019. This means businesses of all sizes can depreciate 50 percent of the cost of equipment acquired during 2015, 2016 and 2017. In 2018, the bonus depreciation will phase to 40 percent, and 30 percent in 2019.
Important for the 2016 Tax Year:
Section 179 provides significant tax relief, but only if you finance in time. All equipment and software must be financed and put in place by 12:00 a.m. on December 31, 2016.
Want to find out how much you can save? Check out this Section 179 Qualified Financing Calculator to see how much your business can save.