While you make your plans for the coming year are you thinking about next year’s Section 179 deduction? You should be. Keep reading to find out why.
Section 179: Year-end Means Now
Every December we receive a flood of inquiries for stock machines available to place on our customer’s floors by December 31 so they can claim the tax benefits on their purchase. That’s the wrong time to consider taking advantage of Section 179.
Most of us don’t think about taxes until the year is almost over. When it comes to Section 179 that’s a big mistake. Budgets are drained. Decision-makers are on holiday. Truckers and rigging companies are booked. Even bad weather can stop that important machine delivery dead in its tracks. When that happens you lose a deduction you could have grabbed months before. Worst of all, not taking advantage of this tax benefit means you are stuck with old, costly to maintain equipment while your competitors are leaning out their operations.
Section 179 Limit Doubled for 2018
For 2018 it’s especially important to assess your needs and make your machine purchases early because Section 179 has changed and it’s all to your benefit.
The new Tax Cuts and Jobs Act increased the 2018 Section 179 deduction limit from $500,000 to $1 million. The spending cap jumped from $2 million to $2.5 million. These changes make it easier than ever to justify the equipment that was always just out of reach of your budget. AUTHOR’S NOTE: these $1 million/$2.5 million limits are unchanged for 2019.
Why NOW is the best time to claim your Section 179 deduction
Purchases made early in the year can benefit from closeout inventory sales. Manufacturer’s 2018 price increases may not have gone into effect yet and if they have, it’s still early enough to make a case for buying your new press brake or fiber laser at last year’s prices.
Most important, a 6-8 month lead time on new equipment isn’t a problem now, but it will be if you wait until the end of the year to make a decision.
Can’t afford new machinery? No problem. Used equipment also counts under Section 179. You can feel confident that replacing your 30-year old press brake with a 5-year old model is a good investment. Short on cash? Leased equipment earns your deduction, too.
Want to learn more about Section 179 and what IT can do to help? Give us a call at 847-301-9005.