While taxes are always tricky, it’s important to take advantage of Section 179 to the fullest. When used properly, Section 179 is an excellent deductions for small to medium sized businesses.
For 12 years, Funding Well Capital has been guiding companies into maximizing their returns and promises to do the same for the 2015 tax year.
What is Section 179?
In short, Section 179 is a part of the IRS tax code permitting companies to write-off the entire cost of qualifying equipment and software purchased during the last tax year from your gross income. Section 179 was included by the U.S. government as a way to induce a stimulus for small businesses to invest in themselves.
Companies are able to deduct dollar-for-dollar up to $200,000 in 2015 on all things purchased, leased or financed. Starting a business and properly hatching your idea takes upfront capital, and not having cash flow can stifle you. Financing property allows you to deduct the total of your purchase, not just what you’re paying for monthly, thus allowing your business to function at a high level and not operate in pools of debt.
How to take full advantage
To take full advantage spend up to the full amount without reaching the limit. If you’re a startup, any money spent over $200,000 isn’t able to be written off. Ensure the equipment and software you are deduction is used for business more than 50% of the time.
Understanding Bonus Depreciation
The IRS defines bonus depreciation as an income tax deduction that allows a taxpayer to recoup the cost of property that wears down or deteriorates over time.
Most types of property, including equipment, software and vehicles qualify as depreciating items. Requirements to deduct a depreciation are ownership, proof that the property is being used for business, and must have a usable life for more than one year. Items disposed of in the same tax year are unable to be written off. Land you own also doesn’t qualify.
As soon as a purchased item is put to use towards and income, the IRS says that item depreciates. Taxpayers are able to deduct the cost of income up until that item’s full original cost or when it’s no longer in use.
Funding Well Capital is your number one financing source staffed by friendly, helpful industry experts here to answer all your questions. Call today and let us show you what we can do for your business.