Section 179 Benefits

What is Section 179 and How Does it Work?

Section 179 is a legal tax incentive which allows businesses to deduct the full purchase price of qualifying equipment (including Used CNC Machines) that were purchased or financed during the tax year. Historically when a business purchased equipment, the depreciation was written off periodically every year. Section 179 allows businesses to write off the entire purchase of qualifying equipment for the current tax year.

The Section 179 deduction has limits. For 2021, businesses can deduct up to $1,050,000 with an equipment purchase spending cap of $2,620,000. The entire deduction goes away when $3,670,000 in purchases is reached.

Why Use Section 179?

Taking advantage of legal tax incentives helps business owners lower their operating cost, and Section 179 is easy to use and gives businesses an incentive to invest in themselves by adding capital equipment, such as CNC equipment; to improve operations and further increase revenue.

To find more information about Section 179 as well as estimate tax savings,
visit the Section 179 website.

THERE'S MORE!
What about Bonus Depreciation?

Bonus depreciation is offered some years, and some years it isn’t. In 2021, the bonus depreciation is being offered at 100%. Previously, bonus depreciation only applied to new equipment, but now applies to new and used equipment. Bonus depreciation is useful to large businesses who spend more than the $2,620,000 spending cap. Section 179 incentives are generally taken first, and bonus depreciation is taken afterwards. Also, businesses with a net loss are still qualified to deduct some of the cost of new equipment and carry-forward the loss.