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What Is the Section 179 Deduction?

Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL purchase price from your gross income. It’s an incentive created by the U.S. government to encourage businesses to buy equipment and invest in themselves.

Section 179 at a Glance for 2018:

  • 2018 Deduction Limit = $1,000,000 (one million dollars)
  • 2018 Spending Cap on Equipment Purchases = $2,500,000
  • Bonus Depreciation is 100%

Fast Facts about the Section 179 tax deduction
This page gives you a quick “big picture” overview of Section 179. The individual pages for each aspect go a little deeper into the details (and we include links to them for ease of use), but this page serves nicely as a quick primer for the Section 179 tax deduction.

Section 179 is a tax code created to help businesses:
By allowing businesses to deduct the full amount of the purchase price of equipment (up to certain limits), Section 179 is a fantastic incentive for businesses to purchase, finance or lease equipment this year.

Section 179 is valid on most types of equipment:
Section 179 really helps companies, because it is aimed at general business equipment, as well as off-the-shelf software. In other words, if you use it in your business, it probably qualifies. See a list of qualifying Section 179 equipment.

Section 179 can greatly help your bottom line:
By deducting the full cost, you lower the amount you pay for equipment and/or software substantially. And these benefits can be further expanded if you choose to lease or finance your equipment and software using Section 179 Qualified Financing.

Section 179 is simple to use:
All you need to do is buy (or finance/lease) the equipment, and use a special IRS form. That’s it. Details here.

Section 179 must be used by the end of the year:
To qualify for a Section 179 deduction, the equipment must have been purchased (or leased/financed) and placed into service by midnight, December 31st of the year you are taking the deduction for.

Section 179 can change from year to year:
For the past several years, Congress has raised the deduction limit, let higher limits expire, then raised them again. The various tax and stimulus acts have also affected Section 179 over the years. The best way to stay on top of Section 179 is to visit Section179.Org often.

There is simply no better time than now:
You should definitely take advantage of Section 179 and the Bonus Depreciation. Why? Because it is a Use-It-or-Lose-It write-off.