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Section 179 Deduction For Equipment

2017 Deduction Limit = $500,000

This deduction is good on new and used equipment, as well as off-the-shelf software. This limit is only good for 2017, and the equipment must be financed/purchased and put into service by the end of the day, 12/31/2017.

2017 Spending Cap on equipment purchases = $2,000,000

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: 50% for 2017

Bonus Depreciation is generally taken after the Section 179 Spending Cap is reached. Note: Bonus Depreciation is available for new equipment only.

What Is Section 179?

Section 179 was designed with businesses in mind. That's why almost all types of "business equipment" that your company buys or finances qualifies 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 will purchase many of these goods during the year, and will do so again and again. Section 179 is designed to make purchasing that equipment during this calendar year financially attractive.

How Much Can You Deduct?

Until further notice, Section 179 is permanent at the $500,000 level. Businesses exceeding a total of $2 million of purchases in qualifying equipment have the Section 179 deduction phase-out dollar-for-dollar and completely eliminated above $2.5 million. Additionally, the Section 179 cap will be indexed to inflation in $10,000 increments in future years.

50% Bonus Depreciation will be extended through 2019. Businesses of all sizes will be able to depreciate 50 percent of the cost of equipment acquired and put in service during 2015, 2016 and 2017. Then bonus depreciation will phase down to 40 percent in 2018 and 30 percent in 2019.

Section 179 can provide you with significant tax relief for this 2017 tax year, but equipment and software must be financed and in place by midnight December 31, 2017.

Note: This is provided by Bobcat as a courtesy to equipment buyers and should not be construed as tax advice or as a promise of potential tax savings or reduced tax liability.  Please contact your own CPA or tax attorney to see how this may apply to your situation.

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