Is Now a Good Time to Invest in Equipment?

Is Now a Good Time to Invest in Equipment?

News Alert: Path Act Sec 179 Allows Businesses to Expense up to $1M

It may just be a good opportunity to review your budgets and invest in equipment before the year ends.

The Protecting Americans from Tax Hikes Act of 2015 (the PATH Act) that was enacted on December 18, 2015. Section 179 of the IRS tax is an incentive created by the U.S. government for businesses to invest in equipment and have it qualify for tax deduction—up to $1M in 2018[1].

According to the Internal Revenue Service (IRS) “A taxpayer may elect to expense the cost of any section 179 property and deduct it in the year the property is placed in service. The new law increased the maximum deduction from $500,000 to $1 million. It also increased the phase-out threshold from $2 million to $2.5 million. For taxable years beginning after 2018, these amounts of $1 million and $2.5 million will be adjusted for inflation.[2]”

Below is an example, based on a 35% tax bracket, on how the incentive is applied.

[1] IRS.Gov, https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act), 11/14/2018

[2] Section 179.org., https://www.section179.org/section_179_deduction/, 11/14/2018

Click to calculate for your business.

If you’re considering purchasing more equipment to invest in your business before the year ends, we can help you with our ready-to-ship inventory. Our sales professionals will be more than happy to help. They may be reached at 800-637-0066.

Please consult your tax professional on how these incentives can be applied to your business.