Do you have money you need to spend before December 31st?
Aptora’s sister company, RA Tax and Accounting, specializes in serving the contracting industry across the USA. They have been advising their clients about some important changes to Section 179 depreciation and we thought you might be interested in knowing this too.
Significant enhancements have been made to Section 179 and here are the things you should know:
- The total amount a business can write off this year for equipment and software just increased to $1 million dollars.
- Businesses can add computer software to the list of assets eligible for Section 179.
- Section 179 is sort of like having the IRS pay you back for your software purchase.
Why This is Important to You:
Example 1
Business X will report a profit of $100,000 on its 2019 corporate tax return.
If they are in a 35% tax bracket, they will owe $35,000 in taxes.
If they buy equipment for $100,000 and write off the full $100,000 under Section 179, they pay nothing in taxes.
Result: They invest $100,000 and reduce their taxes by $35,000.
Example 2
Business X will report a profit of $100,000 on its 2019 corporate tax return.
If in a 35% tax bracket, they will owe $35,000 in taxes.
If they finance their investment of $100,000 (and only make a small down payment), they can still write off the full $100,000 under Section 179. They will pay nothing in taxes.
For more information, go to www.section179.org. Be sure to speak to your accountant about deductibility. It’s important to have quarterly planning meetings with your accountant, especially before the end of each year. If you wish to know more about RA Tax and Accounting please visit their website at www.rataxandaccounting.com.
