In 2021, you need to pay close attention to the Section 179 deadline, and make sure you aren’t left out.
Is it odd that I’m saying this in May? Not this year. And that’s due to supply chains across the board being affected by pandemic shutdowns and post-reopening labor issues. And it is catching many purchasers (both consumers and businesses) off guard, and will continue to do so in the short term.
To give a personal anecdote as an example, I recently moved. And Mrs. Fletch and I left a lot of our old furniture behind, figuring we’d buy new. What we didn’t figure on was the astonishingly long lead time due to the pandemic. Seriously, we’ll be waiting close to four months for a bedroom set. We were lucky on the fridge – that only took two months…
So what does this have to do with businesses and Section 179? Well, the rules for Section 179 state that the equipment must be purchased and put into service by midnight, 12/31. Well, if you are waiting on delivery, you can’t put it into service, can you?
That’s why I am mentioning this in May. If you are looking to purchase equipment in 2021 and planning to take a Section 179 deduction for it, you should be thinking about doing it soon. The last thing you want in this situation is to miss the “put into service” part of the deadline (it’s not enough if you pay for the equipment in full in 2021 – if it’s not put into service, it’s not eligible for Section 179.)
I don’t have to tell you that 2021 is a strange year. As we emerge from the pandemic, it’s going to take time for all industries to resume normal manufacturing and delivery schedules. So definitely check and see how long your purchase is going to take to get to you. And if you need to, buy it now.