If you’ve been considering purchasing, financing or leasing new or used equipment, now could be the right time to do it. That’s thanks to the Section 179 Deduction, which can provide tax benefits geared towards small businesses working in a variety of industries.
If you’re unfamiliar with Section 179, it’s a type of tax incentive that enables business owners to take a tax deduction equal to the full purchase price of qualifying equipment purchases in a given year. Section 179 is applicable for a variety of industries like construction, forestry, mining, recycling, agriculture, as well as software and livestock. There are some limitations on what equipment may qualify, so be sure to check out section179.org to learn more about this incentive and consult your tax advisor.
Details and deadlines for Section 179
These figures and guidelines are based on the 2024 tax year. They may fluctuate in the future.
Here are some guidelines of Section 179:
- To qualify, you must obtain equipment (buy, finance and/or lease) and put it to use by Dec. 31, 2024.
- Limit of $1,220,000, which can be reached by combining purchases. This is a $60,000 increase from 2023.
- For purchases over $1,220,000, there is a 60% bonus depreciation deduction capped at $3,050,000.
- Purchased equipment must immediately be used and should be used for business needs at least 50% of the time.
- Section 179 is impacted by sunsetting. Sunsets are provisions of tax code that expire at a given date. This means the deduction limit will continue to drop annually.
How Section 179 can benefit your business
Your business may be able to utilize Section 179 when purchasing, financing and/or leasing both new and used equipment. Section 179 can be utilized for a wide range of industries and purchases. Read this list of qualifying property, as well as consult with your tax advisor.
For small- to medium-sized businesses in particular, Section 179 can be a way to provide added tax relief. Section 179 has a spending limit for equipment purchases of $4,270,000 — which means businesses who spend more than that on equipment will not receive the deduction. This could make Section 179 a great opportunity for small- to medium-sized businesses to reap tax benefits.
If you’re wondering if the Section 179 tax deduction could benefit your business, section179.org provides a simple tool to calculate your potential savings today.
Who qualifies for Section 179?
To determine if your business qualifies for the Section 179 tax incentive, you will want to get in touch with your tax advisor. In general, most businesses that purchase, finance and/or lease new or used equipment in the 2024 tax year could qualify — assuming the total price spent on equipment is less than $4,270,000 for the year.
If you purchased equipment throughout 2024 but were not aware of Section 179 — no worries! Your tax advisor can help you navigate Section 179 benefits whether you purchased in full or financed equipment throughout the year. If this is the case for you, be sure to bring all machine records to your tax appointment. This includes purchase, financing or lease agreements with the date of purchase and the date you began using the equipment. Additionally, bring records of other costs associated with your equipment — like shipping or set up costs. If you do not have these records on hand, your Vermeer dealer can help obtain copies.
To find out if you qualify for the Section 179 tax deduction, reach out to your tax advisor. If you do and want to make one last purchase before the Dec. 31, 2024 deadline give your local Vermeer dealer a call today.
This information should not be considered legal or tax advice. Contact your tax advisor to learn more.
Vermeer, the Vermeer logo and Equipped to Do More are trademarks of Vermeer Manufacturing Company in the U.S. and/or other countries.
© 2024 Vermeer Corporation. All Rights Reserved.