What is the Section 179 Tax Deduction?
Essentially, section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. It’s an incentive created by the U.S. government to encourage businesses to buy equipment and invest in themselves. More information is available on the official Section 179 Tax Deduction Page.
- 2021 Deduction Limit = $1,050,000 This deduction is good on NEW & USED equipment, as well as SOFTWARE.
- 2021 Spending Cap on equipment purchases = $2,620,000.
- Bonus Depreciation: 100% for 2021 (Deduct the full amount, up to $1,050,000, from 2021 taxes).
- Workstations, servers, laptops, network devices, & software all qualify for the Section 179 Tax Deduction.
This is a PERFECT time to do some technology updates. Section 179 is squarely aimed at small to medium businesses. This deduction is great for refreshing nearly anything, from new PCs, a new server, upgrading that printer that’s been making funny noises and maybe even buying a nice projector for your conference room.