Section 179 Tax Deductions

11/25/2019
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Section 179 at a Glance for 2019

2019 Deduction Limit = $1,000,000

This deduction is good on new and used equipment. To take the deduction for tax year 2019, the equipment must be financed or purchased and put into service between January 1, 2019 and the end of the day on December 31, 2019.

2019 Spending Cap on equipment purchases = $2,500,000

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” (because larger businesses that spend more than $3.5 million on equipment won’t get the deduction.)

Bonus Depreciation: 100% for 2019

Bonus Depreciation is generally taken after the Section 179 Spending Cap is reached. The Bonus Depreciation is available for both new and used equipment.

Example Calculation

Truck Purchases$1,150,000
First Year Write Off
$1,000,000 = 2019 max
$1,000,000
100% Bonus First Year Depreciation
updated to 100% via ‘Tax Cuts & Job Act
$150,000
Normal First Year Deduction
20% in each of 5 years on remaining amount
$1,150,000
Cash Savings
Deduction x Tax Rate (35%)
$402,500
Purchase Cost After Tax$747,500

Information provided by section179.org

Calculate your deductions by visiting the Section 179 Deduction Calculator

 

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