Section 179
Section 179 Quick Guide
Your business may qualify for significant tax savings.
You may qualify for significant tax savings
Use our savings calculator below to find out how much your business can save on your furniture purchase or lease.
Rework does not provide legal, tax or accounting advice. The customer must obtain and rely on such advice from its own accountants, auditors, attorneys, or other professional advisors.
* Note: This deduction is capped at a maximum of $2,550,000 in capital expenditures. For every dollar that your total capital expenditures exceed $2,550,000, your Section 179 deduction is reduced by one dollar up to $3,500,000. In addition, if you have a taxable loss for the year, you are ineligible for the Section 179 deduction. Consult your tax or legal advisor for complete details specific to your situation.
Understanding the basics of Section 179
Section 179 is a tax deduction, which allows businesses to subtract the cost of certain types of assets from their balance sheet. Qualified purchased assets or leased assets can be written off as an expense during the purchase year. In order to meet the tax deduction, the qualified assets must be in use by December 31 of the tax year. Businesses can elect the tax deduction when filing their annual tax return.
The visual represents out of pocket costs for newly acquired leased or purchased equipment eligible for Section 179. While both leased and purchased equipment may qualify for the deduction, the difference is out of pocket expense. With leased equipment, you can pay less upfront, pay monthly lease payments, and still receive 100% deduction under Section 179.
Write it off now and pay it off over time
The Tax Cuts and Jobs Act of 2017 extended Bonus Depreciation to 100% and increased the Internal Revenue Service (IRS) Section 179 limit to $1,040,000 (adjusted for inflation) for 2023 on qualified equipment.*
This means you may be able to write off most or all the cost of newly acquired capital equipment in 2023. New capital equipment which is purchased and/or financed and placed into service between January 1 and December 31, 2023 may qualify for these deductions. This may include equipment that you acquire via capital lease ($1 purchase option).
Additional information to consider:- If IRS Section 179 allowance of up to $1,040,000 is used, capital equipment purchases over that amount may also be eligible for 100% Bonus Depreciation on top of the Section 179 allowance. Expense deduction phases out with purchases starting at $2,590,000 and completely phase out at $3,630,000.
- OR, 100% Bonus Depreciation may be used instead of Section 179 for capital investment.*
Which assets qualify for Section 179?
Most leased equipment and software will qualify for Section 179. Qualifying assets can be used equipment if it is new-to-you. Explore qualifying assets for Section 179:
- Office Furniture
- Office Equipment
- Automobiles
- Computers and software
- Machinery
- Tractors
- Trucks
- Billboards
- Buildings
- Fences
- Land or Landscaping
- Non-mobile trailers
* Disclaimer: Rework does not provide legal, tax or accounting advice. The customer must obtain and rely on such advice from its own accountants, auditors, attorneys, or other professional advisors. These materials are for informational purposes only. Nothing herein constitutes tax advice and customers should consult with their tax advisors prior to electing specific rates or options.
