What is Section 179?

Section 179 is a tax rule that lets businesses deduct the full cost of qualifying equipment and property in the year it’s purchased, instead of spreading the deduction out over time.

This includes items like:

• Computers and software

• Office furniture

• Machinery and tools

• Certain vehicles

For 2024, you can deduct up to $1.22 million in purchases, you'll want to check with a tax professional for the latest updates and the rules can change from year to year. But in 2024 once your total purchases exceed $3.05 million, the deduction starts to phase out.

Benefits of Section 179

💰 Instant Tax Savings

Instead of waiting years to write off purchases, you deduct the entire cost right away, lowering your taxable income and saving money immediately.

🚀 Encourages Business Growth

You can reinvest in your company with less financial stress. Whether you’re upgrading technology, adding a vehicle, or buying new tools, Section 179 helps offset the upfront cost.

✅ Many Items Qualify

From laptops and office desks to heavy machinery and business vehicles, a wide range of assets are eligible.

⏳ Skip Long-Term Depreciation

Normally, equipment costs are spread over several years. With Section 179, you get the full benefit in year one, improving cash flow quickly.

Drawbacks of Section 179

📉 Deduction Limits

• Max deduction: $1.22 million, which could be different today.

• Phase-out starts at $3.05 million in purchases
  Large businesses may hit this cap fast.

📅 Timing is Critical

The equipment must be both purchased and in use by December 31. Buying in December but not using it until January means you miss that year’s deduction.

🚫 Not Everything Qualifies

Land, buildings, and intangible items (like patents or trademarks) are excluded. Always double-check before buying.

⚖️ No Tax Losses Allowed

Section 179 deductions can only reduce your taxable income to zero. If deductions exceed your income, the extra can be carried forward to future years, but not used right away.

Bottom Line

Section 179 is a powerful tax break that can free up cash, help you grow your business, and make equipment purchases more affordable.

Just remember:

• Buy and use qualifying items before December 31.

• Stay within the deduction limits.

• Consult a tax professional to maximize your savings.

With smart planning, Section 179 can turn big purchases into big tax savings for your business.

And again, we recommend you speak with your Tax Advisor to know your options.