The year is coming to a close, and it’s time to think about different ways to lock in tax savings for your business. We discuss the Section 179 tax deduction every year because it’s a great way to grow your business by investing in new or used equipment while taking a significant tax deduction and saving money.
If you buy or lease a piece of qualifying equipment, you can deduct the full purchase price from your gross income for significant tax savings. Section 179 allows you to write off the entire purchase price/depreciation in the year that you bought it, rather than little by little over the next few years.
This is powerful because even with leasing, you can deduct the full market price, even though you are only paying a portion of the full purchase price this year.
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You can use this deduction on new and used equipment alike! Invest in your business and save on taxes.
The Section 179 deduction for 2023 is $1,160,000 (this is up from $1,080,000 in 2022). This is a full $80,000 increase from last year. This means U.S. companies can deduct the full purchase price of ALL qualified equipment purchases, up to the limit of $1,160,000. In addition, the “total equipment purchase” limit has been raised to $2,890,000 (up from $2.7 million in 2022). The deduction can include both new and used qualified equipment. Visit section179.org for more information about this deduction.
In order for you to take the deduction, the equipment must be purchased and put into use by December 31st, 2023.