Section 179 – Save Big on Purchases in 2018 w/ End Of Year IRS Tax Deduction
The end of the year is a stressful time for business owners. Conducting day to day operations while assessing what needs the company will face in the upcoming year can create a whirlwind of information flowing through decision makers’ minds. Luckily, the U.S. government implemented a savings promotion, Section 179 of IRS tax code, to allow businesses to buy equipment and invest in themselves year over year.
Tax Savings with Section 179
Section 179 of the IRS tax code is an incentive available to anyone purchasing or leasing a new truck before the end of the tax year. It allows businesses to deduct the full purchase price of qualifying equipment purchased or financed during the tax year. In years past, businesses typically wrote off the cost a little at a time through depreciation. Being able to write off the whole purchase has made a big difference for many companies and the overall economy as businesses use Section 179 to purchase needed equipment the same year, instead of waiting.
Limits of Section 179
While there are many benefits to Section 179, it is important to know the limitations of the incentive. There is a $1,000,000 cap to the total amount permitted to be written off in 2018. The total amount of the equipment purchased must also fall below $2,500,000 in 2018. According to the IRS, “the Section 179 deduction begins to phase out on a dollar-for-dollar basis after $2,500,000 is spent by a given business (thus, the entire deduction goes away once $3,500,000 in purchases is reached), so this makes it a true small and medium-sized business deduction.”
Qualifications of Section 179
All businesses that purchase, finance, and/or lease new or used equipment during the tax year for official purposes qualify for the Section 179 deduction as long as they spend less than $3,500,000. In order to receive this deduction for the 2018 taxable year, all equipment must be purchased and put into use between January 1, 2018 and December 31, 2018.
Most tangible goods that are used by companies qualify for the deduction. This includes off-the-shelf goods and business-use vehicles. Computers and software, office furniture and equipment, and business vehicles with a gross weight greater than 6,000 lbs are all examples of qualifying deductible equipment.
Business vehicles that are not likely to be used for personal use and are guaranteed to be qualified for Section 179 include:
- Vehicles that can seat nine-plus passengers behind the driver’s seat (i.e.: Hotel / Airport shuttle vans, etc.).
- Vehicles with: (1) a fully-enclosed driver’s compartment/cargo area, (2) no seating at all behind the driver’s seat, and (3) no body section protruding more than 30 inches ahead of the leading edge of the windshield. In other words, a classic cargo van.
- Heavy construction equipment will qualify for the Section 179 deduction, as will forklifts and similar.
- Typical “over-the-road” Tractor Trailers will qualify.
Where to Purchase Qualifying Business Vehicles
Nextran Truck Centers sells, leases and finances Section 179 qualifying light, medium and heavy-duty commercial trucks. With 16 locations throughout Florida, Alabama and Georgia, we provide business with the chance to attain the vehicles they need for operations. For more information on purchasing a new or used truck, or for service on your current trucks by Ford, Mack, Isuzu, Volvo and more, call or visit your nearest Nextran dealership: