There have been some changes to section 179 tax deductions and here’s an overview of what you need to know!
2023 Deduction Limit Increase = $1,160,000
This deduction, which is an increase of $80,000 over the 2023 deduction limit, can be applied to used or new floor grinding and polishing equipment. This includes CPS Floor Grinders AND Dust Extractors!
2023 Spending Cap on Equipment Purchases = $2,800,000
If you spend above $2,800,000 on equipment, the Section 179 deduction available to your company will be reduced on a dollar-for-dollar basis.
2023 Bonus Depreciation = 100%
After you reach the Section 179 spending cap, you can take bonus depreciation on both used and new equipment.
How Section 179 Works
In the past, when a company purchased equipment that qualified for a tax deduction, they wrote it off gradually over the course of several years through depreciation. This meant that while a business might spend $20,000 on a piece of equipment in a single year, the tax benefits came in the form of a $4,000 write-off each year for the next five years.
Tax write-offs over time for a depreciating asset are better than no write-offs at all, but Section 179 makes it possible to write off the entire equipment purchase price in the same tax year it is bought. This has been a benefit for many small businesses, and has boosted the economy in general. Many smaller companies can write off the full cost of qualifying equipment on their 2023 tax return, up to $1,000,000.
Don’t Leave Money on the Table
Section 179 deductions are a crucial savings opportunity that every eligible business should consider in their financial planning process. Take advantage of these deductions before the end of the tax year and contact CPS for a FREE demonstration or quote and get started expanding your business to be ready for the 2024 rush!