What is the Section 179 Tax Deduction?
Section 179 is a fairly simple, yet often overlooked provision of the tax code which allows a small business to deduct in full, the purchase price of qualifying equipment and/or software.
For example, suppose you are in the newspaper printing business and you need a new printing press costing $50,000. Also suppose your business will earn $100,000, net of your other expenses. If you buy the press, you may use section 179 to write off its full value, and therefore only pay tax on $50,000 of income.
Without section 179, you would have to use a depreciation schedule to figure out how much of the $50,000 was actually tax deductible. The result would be nowhere near as favorable.
To get more detailed information about section 179 and it's possible limitation and applications, check back to my blog as I continue to post about the topic. In the meantime, you can visit section179.org for a wealth of section 179 information.