Deduction Limit: $1,000,000
Spending Cap on Equipment Purchases: $2,500,000
Bonus Depreciation: 100% for 2019
What is Section 179?
Section 179 is a Tax Code deduction which allows businesses to deduct the full purchase of qualifying equipment and/or software purchased or financed during the current tax year.
How does Section 179 work?
Rather than writing off qualifying equipment purchase(s) a little at a time, the Section 179 tax code allows businesses to write the entire purchase of up to $1,000,000 off the same/current tax year it is purchased. This tax code is aimed to assist businesses to get the equipment they need and now than wait. Since it’s a use-it-or-lose-it basis, there is no better time to invest in a new (or used) MultiCam CNC Router, Laser, Plasma, Waterjet, or Digital Finishing System.
Who Qualifies for Section 179?
The Section 179 is a Tax Code deduction which can be utilized by all businesses that purchase, finance, and/or lease new or used qualifying equipment during the 2019 tax year (assuming they spend less than $3,500,000).
What Type of Equipment Qualifies for Section 179?
Section 179 can be used for equipment investments such as CNC machinery, computers, software, office equipment, and vehicles (with limitations) to name a few but must be used more than 50% for business purposes.
Section 179 Limits
In order for the Section 179 Tax Deduction to apply, the equipment must be put to use the same Tax year in which a business is filing. For the 2019 Tax Year, the deduction limit is set at $1,000,000 while the Spending Cap is set at $2,500,000. All businesses that purchase, finance, and/or lease less than $2,500,000 (2019) for new or used equipment during the tax year should qualify for the Section 179 Tax Deduction. But once the deduction surpasses $2,500,000, it decreases on a dollar for dollar scale.
Using the Section 179 Calculator, we drew up an example to reflect the potential savings of purchasing a MultiCam CNC machine.
A customer just purchased a MultiCam CNC Router for $200,000. By utilizing the Section 179 Tax deduction and assuming there is a 35% Tax Bracket, the customer would have a cash savings of $70,000 resulting in a lowered cost of equipment of $130,000.
All MultiCam equipment and software qualifies but it is highly recommended to verify your tax bracket and potential investment qualifies for the Section 179 Tax Deduction. In most cases customers can purchase a MultiCam CNC machine and write-off the entire purchase the same day and year they are buying it.
Take advantage of these savings by investing in a new MultiCam CNC machine – contact us today at (972) 929-4070 or [email protected] to get started!