In 2019, the deduction limit under IRS Section 179 for purchasing or leasing equipment remains at $1 million dollars. Under this section of the tax code, businesses can deduct the entire purchase cost of qualifying software and equipment that has been financed or purchased during the tax year — up to the $1 million limit.
That means if your organization leases or buys qualifying equipment, you can deduct the price of it from your gross income — an enormous benefit come tax time.
In fact, the United States government developed this section of the tax code to encourage businesses to spend money on equipment and to spur economic growth.
Benefits and Limitations of Section 179
Obviously, there are positive tax implications for businesses that choose to lease or buy qualifying equipment or software. Under Section 179, you can write off 100% of the cost (up to the $1 million limit) the year you place it into service.
But, there’s also a $500,000 Bonus Depreciation clause that allows you to deduct an additional $500,000 the first year, bringing your total write-off to $1,500,000. This bonus will be available through 2022 and has been made retroactive to September of 2017.
According to the IRS, using the Section 179 deduction often results in your tax savings from the deduction exceeding the amount of the payments for your equipment, helping bolster your bottom line while allowing you to increase your operational capacity.
However, while IRS Section 179 allows qualifying purchases up to $1 million to be deducted fully in the first year under the American Taxpayer Relief Act, there are no guarantees that it won’t change in scope and breadth from year to year. That means savvy business owners should act quickly to secure the benefits in the 2019-2020 timeframe to avoid potential alterations in the legislation.
Be aware, there is a limit of $2,500,00 on purchased equipment. Once that limit is met, the IRS Section 179 deduction faces a dollar-to-dollar reduction. When the purchase price of equipment moves to $3,500,000 and over, the deduction is no longer available.
Deploying Section 179 to Upgrade and Secure Your Fleet of Printers or Copiers
If you have office equipment that doesn’t meet your needs or requires updating, you can leverage the benefits of Section 179 to purchase or lease a brand-new fleet with ease.
Partnering with an IT solutions team that can analyze your usage, requirements, and workflow to put together an appropriate-sized configuration of machines with the functionality you need is the first step toward taking advantage of these tax benefits.
Replacing old, outdated machines is smart on two levels. First, new machines will provide better functionality and increased productivity — two factors which translate into increased revenue and a healthier bottom line.
In addition, upgrading your machines can help with data protection and data recovery in the case of a natural disaster, cyberattack, or lost or stolen data.
Keeping your business continuity strong is key in our highly competitive modern economy and being able to recover quickly from tech disasters is one way to accomplish this.
And, using expert assistance to create — and maintain — a workable equipment scheme helps take the pressure off in-house IT teams so they can focus on more crucial tasks. For those small businesses without an IT department partnering with experts allows for critical review and care of technology that is easily scalable as your business grows.
Kelley Imaging – Your IT Solutions Experts in Seattle, Washington
With over 40 years of providing cutting-edge IT solutions, Kelley Imaging is uniquely positioned to help companies take advantage of their Section 179 benefits.
With an eye toward budget and function, our knowledgeable team of experts has the technology planning skills needed to help determine the best configuration of equipment to serve your unique needs.
And, as experts in data protection and disaster recovery, we can ensure that you have the most current upgrades, updates, and technology to create a secure, protected environment for your — and your customer’s — critical data.
If you’re ready to get the most out of your Section 179 benefits this year, get in touch with one of Kelley Imaging consultants to get started.