Thanks to the tax deduction titled “Section 179 election” (see www.section179.org for additional details), the Federal Government allows you to buy up to $500,000 in machinery, computers, software, office furniture, vehicles or other tangible goods and take the full expense deduction in the current year, thereby REDUCING your taxable income on your current year’s tax return which, depending on your effective tax bracket, could save you up to $206,500.00.
Additionally, since it covers new and used equipment or software, you can get the equipment you need now, take the full tax benefit now, and spread your expense over a multi-year financing term, thus significantly reducing your true cost of ownership.
Consider this example for equipment costing $650,000.00:Equipment Cost: $650,000.00
Equipment Cost: $650,000.00
First Year Write Off: $500,000.00
50% Bonus First Year Depreciation: $75,000.00
Normal First Year Depreciation: $15,000.00
Effective Tax Bracket: 35%
Total First Year Deduction: $590,000.00
Cash Savings: $206,500.00
Net Cost After Section 179 Savings: $443,500.00
The above is an overall, "simplified" view of the Section 179 Deduction for 2016. For more details on limits and qualifying equipment, please reach out to your accountant.
It’s important to note that this is a significant deduction, so don’t miss your chance! It is still real money in your pocket! But you have to act now, as once the clock strikes midnight on December 31st, Section 179 can’t help your 2016 profits anymore.
If you are a current IntelliSystems client, please let us know of any upgrades or new equipment that you would like to purchase so we can go ahead and start that for you.
If you are not an IntelliSystems client, we can also help with technology upgrades. Email Susan Huff at our office firstname.lastname@example.org or give her a call for more information.