Thanks to new guidelines under the IRS Section 179 tax code, many small business that invest in new equipment can now write off up to $1,000,000 of these purchases on their 2019 IRS tax returns. Normally, businesses spread these deductions over several years. But now, with the tax benefits provided under IRS Section 179, many small businesses can write off up to the entire purchase cost of one or more qualifying new Commercial trucks or vans. Again, thats up to $1,000,000 worth, all in the first year they're placed in service.
WHAT DOES THE 179 TAX SAVINGS DO FOR ME?
It gives you a chance to deduct up to $25,000 of a qualifying vehicle from your business's gross income during that tax year-all at one. In some cases you may even be able to deduct the full purchase price of your vehicle. (Please consult your tax professional to find out if you qualify for the full amount). It's especially helpful for small businesses who want their tax savings right away, rather than receiving them bit by bit over time through depreciation. It gives many businesses the financial leeway to purchase vehicles they need right away, rather than waiting.
DOES MY BUSINESS QUALIFY?
You may qualify if you:
Are a business that purchased or financed new or used business equipment - including business-use vehicles - during the 2020 tax year
Put this equipment into service between January 1, 2020 and December 31, 2020
Used this equipment for business purposes more than 50% of the time
Spent less than $3,500,000 on this equipment
WHAT ARE THE DOLLAR AMOUNT LIMITS?
These are the limits on claiming this tax savings:
You cannot write off more than $1,000,000
The total amount of the equipment purchased cannot be more than $2,500,000. It phases out dollar-for-dollar after that, so once $3,500,000 is spent, the deduction goes away entirely.