If you’re like a lot of companies, you’re already looking at your budget for Q4–and maybe even Q1 2022–and working out ways to optimize your expenditures to your benefit. And more than likely, your accountant has already started hinting that year-end is just around the corner. If so, you may have heard your firm mention that you might want to start thinking about how to best allocate your funds for deductions and take advantage of the tax benefits and advantages of Section 179 as you take your strategic planning into consideration.
What is Section 179
According to the IRS, “Section 179 allows taxpayers to deduct the cost of certain property as an expense when the property is placed in service. For tax years beginning after 2017, the TCJA increased the maximum Section 179 expense deduction from $500,000 to $1 million. The phase-out limit increased from $2 million to $2.5 million. These amounts are indexed for inflation for tax years beginning after 2018.”
And in Layman’s terms?
The Section 179 deduction applies to tangible personal property such as machinery and equipment purchased for use in a trade or business, and if the taxpayer elects, qualified real property. In short, if you can deduct up to $1 million if that money is used for machinery that will benefit your business. And if you’re the type of business in the market for CNC machinery, you know that adding a new machine to your business can absolutely impact your bottom line.
How do you take advantage of Section 179?
One of the most common ways to take advantage of Section 179 is in the purchase of new machinery, and it’s one we see here at Reynolds Machinery a lot, especially toward the end of the year. But what makes this year different is the availability of that inventory.
Our upcoming Fall Inventory Technology Show on October 27 is a great opportunity to see what machines we have in stock now that can be scheduled for delivery right away, as well as what will be available for delivery by the end of the year.
Don’t miss your opportunity. Call ahead and talk to us. We can guide you through the process of allocating your funds in the way that will most strategically benefit your business.
