The Section 179 Time Machine

By | May 26, 2015

Section 179 deduction is currently sitting at $25,000. Will congress increase the limit?Despite the title, this isn’t a science fiction story. It’s based in reality, and is aimed at business owners and managers who are putting off purchasing new (or new to them) equipment until they hear that the Section 179 limit has been raised.

To them, I say “If the equipment matters to your bottom line, then don’t wait.” And the reason I say this is the cleverly named (by me) Section 179 Time Machine. It’s a finely tuned machine, and if history is any indicator, it always works.

Yes, it’s true that the Section 179 deduction is currently sitting at $25,000. It’s almost certain to get raised at some point this year, and if it is raised, the raise will almost certainly be made retroactive to Jan 1, 2015. This means if you buy equipment now, and the deduction is raised in, say, November, you will almost assuredly get to take the full deduction.

How do I know this? Because every time Section 179 has been raised in the past decade, the raise was made retroactive to the beginning of the year. In fact, one year it was even made retroactive to the previous year.

This is why I advise companies who need equipment to go ahead and buy it now, and let Section 179 take care of itself, because it always does. The key word in that last sentence is “need”, of course. I’m assuming that this new equipment will be put to use making your business better, more efficient, etc. It makes no sense to sacrifice profits right now, next week, next month, etc. when any raise in the Section 179 limit will be made retroactive anyway.

Now, I do know people who spend money to take advantage of the tax deduction at year’s end. Yes, they could always use the new equipment, but it’s more of a “might as well” purchase than one for true need. To those people, sure, go ahead and wait.

But to anyone who truly needs new equipment? Or new equipment will mean more profit? I say go ahead and buy right now. Because the Section 179 Time Machine is oiled up, and ready to go.


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