Section 179 Expensing and Special Offers

Section 179: A True Small Business Tax Break

The availability of the Section 179 tax incentive means businesses can deduct the full cost of qualifying purchased, leased, or financed products and services from their 2019 taxes, up to $1,000,000, with a “total equipment purchased for the year” threshold of $2,500,000.

The Section 179 tax incentive encourages businesses to invest in themselves and is squarely aimed at small to medium businesses that purchase anywhere from $5,000 to $2,500,000 worth of equipment. The full deduction can be claimed until that $2,500,000 number is reached. Once that happens, the deduction decreases on a dollar for dollar basis (when it disappears entirely once $3,500,000 worth of equipment is purchased.).

Material goods that generally qualify for the Section 179 Deduction

Please keep in mind that to qualify for the Section 179 Deduction, the equipment listed below must be purchased and put into use between January 1 and December 31 of the tax year you are claiming.

  • Equipment (machines, etc.) purchased for business use
  • Tangible personal property used in business
  • Business Vehicles with a gross vehicle weight in excess of 6,000 lbs (see Section 179 Vehicle Deductions)
  • Computers
  • Computer “Off-the-Shelf” Software
  • Office Furniture
  • Office Equipment
  • Property attached to your building that is not a structural component of the building (i.e., a printing press, large manufacturing tools and equipment)
  • Partial Business Use (equipment that is purchased for business use and personal use: generally, your deduction will be based on the percentage of time you use the equipment for business purposes)
  • Certain improvements to existing non-residential buildings: fire suppression, alarms and security systems, HVAC, and roofing

Please note – the above equipment qualifies whether new or used (but must be new to you), and also regardless of whether it was purchased outright, leased, or financed.

†Almost all types of business equipment and “off the shelf” software qualify for the Section 179 deduction. Consult your tax advisor to ensure any products you plan to purchase meet Section 179 expensing guidelines. All equipment must be financed/purchased and in some cases leased and must be received and put into service by midnight on 12/31/2019.

*Credit lines and pricing are subject to periodic review and change, including line and pricing reductions, line and pricing increases, or line eliminations. Individual requests for capital are separate installment loans. All loans are subject to credit approval.

1Kabbage can approve you in minutes for up to $200,000 when they are able to automatically obtain your business data and verify your bank account. Lines of credit over $200,000 require a manual review. In some situations, errors may occur during the sign up process, or they may need to send micro-deposits to confirm your bank account for security purposes. If this is the case, it may take up to several days to provide you with access to funding.

NFIB Member Benefits are offered by third-parties through contractual arrangements with the NFIB Member Services Corporation, a wholly-owned subsidiary of NFIB, or one of its affiliated agencies. Neither NFIB nor any of its subsidiaries or affiliated agencies is providing any products or services to you and they shall not be responsible for any claims or losses relating to the use of the NFIB Member Benefits.

HOW MUCH MONEY CAN SECTION 179 SAVE YOU?
SPECIAL SECTION 179 TAX DEDUCTION ZONES

Section 179 offers businesses located in specific special zones an increase in the overall deduction amounts. The additional deduction amounts vary, depending on which zone your company is currently operating in. If your company is operating in one of the following zones, you may qualify for the increased deduction limits:

  • New York Liberty Zone
  • Enterprise Zone and Renewal Community Businesses
  • Gulf Opportunity Zone (areas affected by recent Gulf Hurricanes)

Click below for more information regarding special Section 179 zones.

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