As we near the end of 2019 (insert *shocked face*), many businesses are reflecting on their year, working to close accounts, hit year-end goals and much more. You, along with many others, are not thinking about taxes. “That’s future Greg’s problem.” This sentiment may work with eating the last cookie during the Christmas potluck, but not in this case. We want you to take full advantage of the tax breaks for small businesses. In that effort, we enlisted the help of our financing partner, QuickSpark Financial. Below we outlined the most common questions they encounter about Section 179.
1. What are the advantages of financing?
A business that finances qualifying equipment will still have the opportunity to take full advantage of the Section 179 tax deduction. Doing so is seen as a financial strategy to the bottom-line operations as this allows you to acquire equipment while making smaller payments, preserving much-needed cash flow. While minimizing out-of-pocket expenses, the business can deduct the full amount of the equipment (and/or software) without paying the full cost in the year acquired. Deductions in this manner can actually allow you to save a higher amount in taxes because the total write-off can actually exceed the full year payment amount for the equipment.2. What is qualifying equipment?
- Equipment & Machines Purchased For Business Use
- Personal Property Used In Business Operation
- Computers & Laptops
- Off-the-Shelf Software
- Office Furniture
- Large Property / Equipment Attached To Building (but not a structural component such as conveyor belts, printing press, large tools)
3. General Information: Section 179 for 2019 Tax Year
The Section 179 deduction program applies to new equipment, used equipment and off-the-shelf software that is financed in the 2019 tax year. At this current time, a business can elect to write-off up to $1,000,000 if the qualifying equipment is placed into service by December 31, 2019.4. Who qualifies for Section 179?
Section 179 was created specifically for small and medium-sized business. Any businesses that purchases and/or finances less than $1,000,000 in qualifying equipment (new or used) during the 2019 tax year should qualify for the IRS Section 179 deduction. The tangible personal property and/or off-the-shelf software must be put into operation by December 31, 2019.5. Electing the Section 179- Form 4562
Taking advantage of the Section 179 deduction tax savings is not automatic through the IRS. A company must fill out form 4562 when filing taxes for the 2019 year, regardless if you are filing on time or through an extension. All Section 179 deductions are taken on an item by item basis, meaning you do not have to elect it on all qualifying equipment that was purchased and used in the 2019 tax year.Interested in taking advantage of the savings by purchasing a Hammerhead® sweeper or scrubber? Click the link below to apply.
You can find the above information, use QuickSpark Financial’s tax savings calculator and more at https://quickspark.com/equipment-buyers/tax-benefits
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