Section 179 was designed with businesses in mind. That's why almost all types of "business equipment" qualify for the Section 179 deduction.
All businesses need equipment on an ongoing basis, be it machinery, computers, software, office furniture, vehicles or other tangible goods. It's very likely that your business has purchased many of these goods during the past year, and will do so again and again. Section 179 is designed to make purchasing that equipment during this calendar year financially attractive.
Keep in mind that to qualify for the Section 179 Deduction, the equipment listed below must be purchased and put into use between Jan. 1, 2015, and Dec. 31, 2015.
- Equipment purchased for business use
- Tangible personal property used in business
- Business Vehicles with a gross vehicle weight in excess of 6,000 lbs (Section 179 Vehicle Deductions)
- Computer "Off-the-Shelf" Software
- Office Furniture
- Office Equipment
- Property attached to your building that is not a structural component of the building (i.e.: a printing press, large manufacturing tools and equipment)
- Partial Business Use (equipment that is purchased for business use and personal use: generally, your deduction will be based on the percentage of time you use the equipment for business purposes).
Section 179 can change each year without notice (Section 179 has even changed mid-year), so it benefits you to take advantage of this generous tax code while it's available.
Section 179 offers small businesses a great opportunity to maximize purchasing power. Use this Section 179 Calculator for 2015 to see if the tax deduction can save your company money.
Most of the equipment your business will purchase, finance or lease qualifies for the deduction, so make sure you do your homework to verify that your company is leveraging the Section 179 Deduction this year.
Section 179 changes in 2015
2015 Deduction Limit = $25,000
This deduction is good on new and used equipment, as well as off-the-shelf software. This limit is only good for 2015, and the equipment must be financed/purchased and put into service by the end of the day, 12/31/2015.
2015 Spending Cap on equipment purchases = $200,000
This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced on a dollar for dollar basis. This spending cap makes Section 179 a true "small business tax incentive".
Bonus Depreciation: not available in 2015
In prior years, Bonus Depreciation would be taken after the Section 179 Spending Cap is reached. Note: Bonus Depreciation was available for new equipment only; in 2015, Bonus Depreciation is not available at all.