Here we go – my final post for 2020. And what a year it’s been. I’m not going to rehash everything, because you went through it too.
Still, despite everything, we’re resilient here in the USA, and businesses moved forward as best we could. In that true American business spirit, many companies made shifts to better position themselves in this “new normal”. 2021 is going to be better for us all.
One thing that’s comforting is the Section 179 deduction is still here, and it’s still quite large ($1,040,000). And better still, like I’ve mentioned a few times in this blog, it is unaffected by any other programs you may have utilized in 2020 (for example, if you got a PPP loan, you can still take your full Section 179 deduction).
The only caveat is you must purchase the eligible equipment, and put it into service, by midnight 12/31/2020. So you still have some time.
In fact, I was thinking about the typical “end of the year” purchases, and how much you can save in one day’s work. We get all kinds of inquiries for Section 179 financing this time of year, as businesses look to get that big purchase in before the year ends.
For an example, let’s say you buy / finance a $100,000 piece of equipment on 12/30, and put it into service right away. Since you financed it, you are literally paying nothing for it in 2020. But you get to write off the entire $100k on your 2020 taxes, even though you technically only had it a day or two in 2020. At a 35% tax rate, you just saved $35k on your taxes.
That’s 35,000 real dollars that stay in your bank account. If you didn’t buy the equipment, they’d be going to the IRS. So your bottom line is $35K larger. Not bad for a day’s work, huh?
Section 179 is vital, and it’s available to you. Use it.
Hey, have a great holiday everyone. Looking forward to a much better 2021 (maybe I’ll get a few good predictions in!)