Are you taking advantage of Section 179?

Posted on: Dec 01, 2016 - 11:50 AM | General
Author: Staff

Are you taking advantage of Section 179?

You can receive a $500,000 deduction on new or used equipment or software that you buy or lease in 2016.  There is also a 50% bonus depreciation for the purchase of new equipment. You can spend up to $2 million dollars on Section 179 equipment before deductions are reduced.

Qualifying equipment must be purchased and placed in service before midnight on Dec. 31, 2016.

2016 Deduction Limit = $500,000
This deduction is good on new and used equipment, as well as off-the-shelf software. This limit is only good for 2016, and the equipment must be financed/purchased and put into service by the end of the day, 12/31/2016.

2016 Spending Cap on equipment purchases = $2,000,000
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".

Bonus Depreciation: 50% for 2016
Bonus Depreciation is generally taken after the Section 179 Spending Cap is reached. Note: Bonus Depreciation is available for new equipment only.

The above is an overall, "simplified" view of the Section 179 Deduction for 2016.

Here is an updated example of Section 179 at work during this 2016 tax year.


This is meant for informational purposes only and is not meant to provide tax advice.

Always consult your tax preparer regarding your tax situation.

For more information on Section 179 click here.