As you likely know, the Section 179 Deduction was raised to $500,000. And it’s generally good for most capital equipment. This means for most small and medium businesses, almost anything they buy for their business qualifies. New machines? Yup. Office furniture? Sure. Office machines? Yes indeed.
Here’s a partial list that covers most things:
- Equipment (machines, tools, etc.) purchased for business use
- Tangible personal property used by your business
- Business Vehicles with a gross vehicle weight in excess of 6,000 lbs.
- Computers and “Off-the-Shelf” Software
- Office Furniture and Office Equipment
- Property that is “attached” to your company building, but is not a structural component of the building (large manufacturing machines/equipment)
- Partial Business Use Equipment (something that’s used only sometimes in business – the deduction is typically for the percentage of business use)
You can buy the equipment from anywhere, and it can even be used. You can even go down to your local supply shop on New Year’s Eve, buy that machine you’ve had your eye on, bring it back to your company, plug it in and turn it on – as long as you turn it on before midnight on the 31st, you’re good (and literally, I’ve seen people do exactly that!)
One more thing – you can finance the equipment, take the full deduction for 2016, and not even start paying until 2017. That’s a nice little scenario for your 2016 bottom line, isn’t it? New equipment, and a nice tax deduction to boot.
Again, if you are reading this before midnight 12/31, you still have time. Even if it means rushing out to Big Joe’s Equipment Shack at 10pm!
Have a Happy New Year, everyone.