Using Section 179 Early in the Year

By | February 1, 2024

Let’s talk about making Section 179 acquisitions early in the year. Because it’s a great time to take advantage of this excellent tax deduction.

Section 179’s deduction limit is a healthy

I can hear you saying “But Fletch, nobody talks about Section 179 early in the year. In fact, I never even think about it until the fourth quarter when I’m scrambling to get my equipment purchases in to make the deadline.”

And that’s exactly my point. Using Section 179 earlier in the year makes a ton of sense. Let me list a few reasons why:

You LOCK IN Your Tax Deduction

I’ve known companies who held off on a Section 179 purchase, opting to wait until later in the year. Then, for whatever reason, the purchase never happened, and they missed the deduction. Now maybe the reason was that the equipment delivery timeframes were too long to make it by year-end. But usually it was something minor, and acquiring new equipment got pushed a bit because it was another “thing” on the list. 

Making your Section 179 purchases early in the year guarantees you will get the deduction. If you plan to acquire eligible equipment this year, and you can acquire that equipment now, then you probably should. 

The Equipment Earns Revenue

In most cases, a Section 179 purchase is tied to earning revenue. Machinery,  vehicles, technology… these all earn revenue, most of them from the day you put it into service.  Having more months of revenue producing equipment at your disposal has no downside. You’ll still get the deduction, and you had the advantage of the equipment working for you all year. Not a bad deal. 

Not Rushing to Buy = Better Equipment Choices

When you are rushing to beat the deadline late in the year, your equipment options may be limited. Did you really want the bare bones model in “Mud Brown”? No? Then why did you wait? Because that’s all the dealer has left, and there’s no time left to order a different one. Take it or leave it. 

Note: they probably had 50 of them back in March. With all kinds of helpful options… in “Midnight Blue” no less! 

Wrapping Up

Section 179 is good on purchases made all year. But there are definite advantages to using Section 179 early in the year. You guarantee you’ll get the deduction, you can earn more revenue, and the selection is probably a lot better, especially since you’re not in a rush to buy.  

If you need it, get it. That’s my take! 

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