Section 179 Tax Deduction at a Glance for 2018

Section 179 Deduction
2018 Deduction Limit = $1,000,000 (one million dollars)

This deduction is good on new and used equipment, as well as off-the-shelf software. To take the deduction for the tax year 2018, the equipment must be financed/purchased and put into service between January 1, 2018, and the end of the day on December 31, 2018.

2018 Spending Cap on equipment purchases = $2,500,000 (two million, five hundred thousand dollars)

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” (because larger businesses that spend more than $2.5 million on equipment won’t get the deduction.)

Bonus Depreciation: 100% for 2018

Bonus Depreciation is generally taken after the Section 179 Spending Cap is reached. Please Note > Bonus Depreciation is available for new equipment only; used equipment qualifies for Section 179 Deduction, but does not qualify for Bonus Depreciation

The above is an overall, “simplified” view of the Section 179 Deduction for 2018. For more details on limits and qualifying equipment, please read this entire page carefully. iStore offers this information without warranty and is not providing accounting advice. Please consult your Tax Advisor or CPA for advice.

Take advantage of Section 179 to help your business.

As the year-end approaches, you may be thinking about how to grow your business in 2018. One way to make the most of your money is to take advantage of Section 179, a tax break available for certain expenditures such as new computers or software from iStore.

What is Section 179?

It’s a tax deduction that enables you to depreciate assets as an expense in the first year. By deducting the full cost, you can substantially lower the amount paid for equipment. It applies to equipment that is purchased, financed or leased in the tax year.

Are computers and software eligible?

Computers and “off-the-shelf” computer software fall under Material goods that generally qualify for the Section 179 Deduction and is considered eligible property when acquired for business use.

Is there a monetary limit?

As of January 1, 2018, businesses that purchase $2 million or less in equipment can deduct up to $1,000,000 of that expense. Purchases over $2,500,000 may be eligible for Bonus Depreciation.

Is there a time limit?

Yes! Assets must be put into service by December 31. If you’re considering a purchase, now is the time to act.

News Alert: IRS Fact Sheet issued for 2018

Apr 25, 2018 –   Factsheet FS-2018-9 provides info on Section 179 deductions including temporary 100 percent bonus depreciation, changes to depreciation limitations on vehicles used for business, new treatment of farm equipment, and the recovery period for real property.  Read the new IRS Factsheet here:  New Rules and Limitations for Depreciation and Expensing under the Tax Cuts and Jobs Act

To see if you’re eligible and to calculate the savings that could be made, iStore advises speaking to a financial advisor. Please refer to the official website for further information.

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