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Save money with Section 179

[/vc_column_text][vc_column_text]Today we’re reviewing tax codes – wait don’t go! While some tax topics can be complicated, there’s one that is pretty straight-forward and it can generate BIG savings for your business. It is especially important this year because they are allowing larger write offs for the equipment you purchase to keep your business running smoothly. Who doesn’t want an extra $40,000 of write offs this year?

The tax code in question? It’s Section 179*. The beauty of this deduction is that it allows your business to write off the whole purchase price on qualifying equipment in the current tax year. In the simplest terms, you could write off up to $1,040,000 on your 2020 tax return. It helps to lower your taxable income, meaning that you can keep more of what you earned in 2019 rather than paying it in taxes. Still not convinced? Keep reading and bring up Section 179 to your tax preparer.[/vc_column_text][vc_empty_space height=”30″][vc_column_text]*We’re barcode and RFID experts, not tax specialists. This article is meant to introduce you to Section 179. For tax guidance or questions, please consult a tax professional. For your supply chain products, services and supplies, you’ve come to the right place![/vc_column_text][vc_empty_space height=”30″][/vc_column][/vc_row][vc_row css_animation=”” row_type=”row” use_row_as_full_screen_section=”no” type=”full_width” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern”][vc_column width=”3/4″][vc_column_text]

PPP Loan Update

[/vc_column_text][vc_column_text]Purchase Equipment with Unused PPP Funds

Do you have any money left over from your Paycheck Protection Program Loan? Are you struggling to decide where to allocate these funds? You can use your loan money to purchase eligible equipment and still enjoy a tax reduction thanks to Section 179! Improve your business, make the most of your loan: It’s a win-win!

As you are likely aware, the PPP loan decreases the amount you can deduct on your tax returns for this year, including rent and payroll. Under Section 179, allocating your loan toward business improvements such as software and equipment can decrease your tax liability.[/vc_column_text][vc_empty_space height=”30″][vc_column_text]

Eligibility

[/vc_column_text][vc_column_text]Companies

There are a variety of small and medium businesses this deduction applies to. If your businesses has purchased, financed, and/or leased new or used business equipment during tax year 2020, you should qualify for the Section 179 Deduction. There is a cap for how much you can spend on equipment to qualify, but we will get back to that in a minute.

Equipment

Section 179 applies to equipment, tools, hardware and out-of-the-box software for your business. These items can be new, or new-to-you, as long as they were purchased and put into use within 2020.[/vc_column_text][vc_empty_space height=”30″][vc_column_text]

Deduction Details

[/vc_column_text][vc_column_text]Limit

$1,040,000 can be written off for new and used equipment. It also applies to off-the-shelf software. The limit to the total amount of equipment purchased is $2,590,000.

After $2,590,000, the deduction begins to phase out on a dollar-for-dollar basis. If your company spent more than $3,630,000 on equipment this tax year, we’re sorry to say this deduction does not apply to you.

Business Use Rule

One more caveat about the equipment; the applicable equipment must be used for business purposes more than 50% of the time to qualify for the deduction.

Deadline

To qualify for your 2020 tax return, your equipment must be financed or purchased and put into service between January 1st, 2020 and December 31st, 2020.[/vc_column_text][vc_empty_space height=”30″][vc_column_text]

Bonus Depreciation

[/vc_column_text][vc_column_text]Big businesses, this one’s for you! Bonus Depreciation can be taken after the Section 179 spending cap is reached. Some years it is offered, some years it isn’t. This year, not only is it offered at 100%, but you can also use the bonus depreciation on new and/or new-to-you (used) equipment.[/vc_column_text][vc_empty_space height=”30″][vc_column_text]

Be prepared for 2021

[/vc_column_text][vc_column_text]This year has been a tough one for many. Maybe you didn’t spend as much as in previous years as a result. But your spending today could put you ahead for next year if you make use of Section 179! The scanners, printers, etc. you’ve been considering come with quite the incentive. Up to 1,040,000 incentives if you ask us. Don’t wait until 2021.

When it comes to your supply chain needs, we have the equipment, software and service to help you automate more, access more, achieve more. Reach out today and we will help you make the most of your deduction.[/vc_column_text][vc_empty_space height=”30″][vc_column_text]*We’re barcode and RFID experts, not tax specialists. This article is meant to introduce you to Section 179. For tax guidance or questions, please consult a tax professional. For your supply chain products, services and supplies, you’ve come to the right place![/vc_column_text][/vc_column][vc_column width=”1/4″][vc_empty_space height=”75″][vc_column_text]

Just interested in the highlights?

Click on our infographic below.

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Ready to make the most of your deduction?
Give us a call or fill out our secure form!

800-281-3056

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