As tax season approaches, it’s important to consider what write-offs your small business qualifies for. By deducting these expenses from your income, you lower your tax liability. More money in your pocket gives you more chances to remain competitive and meet market needs, which is the key to long-term success.
One write-off you should definitely take advantage of is IRS 179. Under this section of the federal tax code, you can deduct the full price of qualifying business-related equipment purchases, including machinery, fleet vehicles, software systems, and more. The best part? You qualify for the tax deduction even if you finance your purchase rather than pay for it all upfront.
How to Lower Your Tax Burden With IRS 179
Can you write off equipment for business all at once? Before IRS 179, you had to take your purchase price deductions over a five-year period. If you bought $250,000 of computers for your new office, you could only deduct $50,000 annually. That meant you took on the entire tax burden right away but had to wait half a decade to see all the benefits.
With IRS 179, you can write off the entire $250,000 the same fiscal year you bought and began using your computers. And remember: Even if you work with a lender like PEAC Solutions to help you finance your purchase over time, you’ll still be able to earn the full tax deduction.
Determining Your 2022 Deduction
Want more great news? Starting the 2022 fiscal year, the maximum IRS 179 deduction jumps from $1.05 million to $1.08 million. That’s a $30,000 increase, and it allows you to make even more equipment purchases to get and stay ahead.
Wondering how much you can save with IRS 179? Check out PEAC Solutions’ tax savings calculator. With this tool, you can see just how much you’ll save. And if you’ve been holding off on an expensive purchase due to cash restraints or the potential tax burden, wait no longer. Check out this page to learn more about our equipment financing solutions.
Who says tax season can’t be rewarding? With IRS 179, you can remove barriers to success for your growing company.
*Credit and equipment restrictions apply. This program does not assume your company will qualify to take advantage of the IRS Section 179 depreciation schedule, which allows rapid first-year depreciation of certain assets acquired. Please consult a tax advisor or accountant for additional information.