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Upgrading and updating your business' technology can be a costly endeavor. But in order to keep up with your competitors and stay ahead in the marketplace, it's a necessity. The good news is that by buying smart, you can get a chunk of that money back.
Section 179 is a tax deduction available to business that allows you to recoup some of the money spent specifically on technology. In December of last year, Congress passed and signed the PATH Act, which increased the Section 179 limit to $500,000. By writing off the full amount paid for any qualifying technology, you can significantly lower the cost to your business. You can get the equipment your business needs to stay productive without impacting your overall budget.
The current Section 179 deduction is only available for equipment purchased and installed prior to December 31, 2016. All types of business equipment qualify for Section 179 tax benefits, including used equipment. The cost of off the shelf computer software is also eligible for Section 179 expense treatment.
In addition, the law extends the special depreciation allowance (also known as bonus depreciation). As a result, bonus depreciation tax benefits will also be available in 2016. This allowance lets taxpayers deduct 50% of the cost of qualified property placed in service during the tax year. The property must be “new” property with its original use beginning with the taxpayer (used property does not qualify).
As with all tax related matters, you should consult with your tax professional for complete details and eligibility requirements.
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