And hopefully, you’re planning to use Section 179 for 2018. Because like all years, the Section 179 tax deduction will expire at midnight on 12/31. And for 2018 (and beyond), the deduction is a cool one million dollars.
The expanded limits (thanks to 2017’s Tax Cut and Jobs Act) really helps small businesses. And the fact that Section 179 is going to be here year after year helps as well – it essentially assures that you can continually buy (or finance) equipment, year after year, and take the full price of the equipment as a deduction.
At the risk of sounding too self-congratulatory, the above is a bit profound, because Section 179 is changing the way many small and medium companies operate. It makes buying equipment easy, and far more affordable, and means they can upgrade equipment faster. Many companies are planning on buying yearly equipment for as long as this ride lasts. I don’t blame them.
This has a circular effect, because when a company upgrades equipment, the “replaced” machinery typically goes into the used equipment market. This influx of good used equipment helps smaller companies just starting out. I see it all the time – a three-year-old tree removal company that’s mildly profitable makes a big jump and finances a used crane and a second bucket truck, instantly increasing their service level tenfold. That’s how you grow.
The really neat part is the equipment gets to take the Section 179 deduction multiple times. The company that originally bought the equipment takes the deduction when they buy it, and when they sell it, the new owner also takes a Section 179 deduction on the same piece of equipment (albeit at the used price, of course).
So here’s your reminder – you have until midnight December 31st to buy (or finance) equipment, and get it into service (getting a vehicle registered, installing the machine and turning it on, etc.) Then you can take your Section 179 deduction for 2018.
Happy shopping, and we’ll see you in 2019.