If you are a business owner, there are certain tax credits that you can easily take advantage of. One of these is the section 179 tax credit. With this credit, you will be able to deduct the cost of certain purchases up to $125,000. By fully understanding what the section 179 tax credit is, you will be able to fully use it to your advantage.
What is Section 179?
When you buy a property that is considered to be depreciable, or one that will last at least a year and fall in value, like a car, office furniture or computer, you can take the full value of that item as a deduction. In order for the item to qualify as a section 179 item, it has to be used more than 50% in your business and you will have had to have purchased it from a third party. In other words, buying the item from a family member is not acceptable in this case.
What Types of Items Will Qualify for Section 179?
There are many types of items that will qualify for section 179. For instance, you may need to purchase a plane for your company. If you do, you can deduct the cost of the plane up to $125,000. In addition to airplanes, other transportation items like trucks, cars and vans can also be deducted. You can use this tax credit for technological items like computers and software. Livestock, farm machinery, movable signs, tractors and many more items will also qualify.
There are a number of items you may think would qualify, but they don’t. For instance, a new barn will not qualify for this tax credit. Buildings, improvements like elevators, sidewalks and warehouses are also ineligible. If you are unsure if an item you have purchased or considering purchasing will qualify, it is important that you reach out to a tax professional.
Finding a tax professional is fairly easy. You will simply want to get a recommendation from someone you know or do some independent research on your own. It will be important to make sure that the tax professional you are working with is familiar with section 179 and that they are trustworthy. You can find out a lot of information on their website and by looking at reviews from independent sources.
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