Looking for a tax deduction related to your equipment lease or financing?
What many businesses may not know is that you can qualify for a Section 179 deduction just for financing equipment. This tax deduction allows businesses who pay cash, finance, or lease equipment to deduct all or part of the purchase price of qualifying equipment during the tax year.
How much can your business save? See how much using our FREE tax savings calculator.
In This Article…
- Everything You Need to Know about Section 179 for 2023
- Calculate Your Potential Section 179 Deduction in Seconds
- Apply For Equipment Financing
Everything You Need to Know about Section 179 for 2023
With Section 179, your business can accelerate its deduction and save thousands of dollars immediately. Here are the current numbers for this year's Section 179:
- The deduction limit has now increased to $1,160,000 (up from $1,080,000).
- The spending cap is now $2,890,000 (up from $2,700,000).
- The deduction maxes out after $4,050,000 (up from $3,780,000).
- Bonus Depreciation dropped to 80% (last year was 100%).
How Does Section 179 Work?
Typically when your business acquires equipment, tax deductions are realized over your equipment's useful life. With IRS Section 179 your business can write off the entire equipment purchase the year you acquired it.
Rather than spreading out your tax deduction over multiple years, Section 179 allows your business to benefit immediately.
Who Qualifies for Section 179?
Businesses that purchase eligible new or used equipment during the tax year may qualify for a Section 179 tax deduction.
Equipment must be financed between January 1st and December 31st, 2023.
To claim a Section 179 write-off for Depreciation and Amortization, fill out form 4562 with your income tax return.
How Much Can You Save with Section 179
Every year, the U.S. government sets the deduction limit and spending cap for equipment. Once this limit has been reached, the deduction decreases on a dollar-for-dollar basis. You can also take advantage of bonus depreciation for certain types of equipment above the Section 179 threshold, which helps reduce your tax burden further.
Section 179 lowers the cost of your equipment by allowing you to deduct 100% of your equipment purchase (up to $1,160,000) the tax year you acquire it. That means you get your maximum deduction on your 2023 return rather than spreading it out over multiple years.
Equipment That May Qualify For a Deduction
New or used equipment must be acquired before the end of the year and put into use for your business to qualify for Section 179. Everything from heavy-duty equipment like tow trucks, boom trucks, landscaping equipment, septic pump trucks, screen-printing and embroidery machines may be eligible. Remember: The equipment must be used for business more than 50% of the time.
As with any tax-related questions, consult your CPA before your purchase to find out if the equipment you want is eligible for the Section 179 tax deduction.
Calculate Your Potential Section 179 Deduction in Seconds
A Section 179 calculator can help you estimate your first-year deduction, estimate any potential bonus depreciation, and estimate your equipment cost after your tax savings.
Beacon Funding's Tax Savings calculator can help you estimate how much equipment financing will save you on your next tax return. To see your potential tax savings, click the link below to use Beacon Funding's FREE mobile app.
Doing the match doesn't need to be complicated -- watch the video to see how this powerful calculator shows your potential tax savings in just a few clicks!
With the app, you can calculate your potential tax savings from anywhere! Bring it with you while browsing for your next equipment purchase and get instant estimates.
Download the app now by scanning the QR code or click the mobile app buttons now.
How to Use Beacon Funding’s 3-in-1 Calculator
- Type in the cost of your equipment.
- The calculator will show your first-year deduction, bonus depreciation, and net equipment cost after tax savings.
- Remember to share your results with your accountant to see if you qualify.
If you are thinking about acquiring new or used equipment to qualify for the deduction on your 2023 return, consider equipment financing. You can breakdown the cost of your equipment purchase into low monthly payments while still receiving your max first-year deduction.
Since 1990, Beacon Funding has helped tens of thousands of businesses acquire equipment with financing so they can keep more cash in their pocket.
Check out the equipment financing plans available for your business.