If you are a business owner and you purchase a depreciable asset, you may be eligible to use a section 179 tax deduction. With this deduction, you will be able to deduct the depreciated value of these assets, including assets like vehicles, office furniture, machinery and much more. There are some general rules that will come into play when it comes to a section 179 tax deduction and it will always be best to speak with your accountant to see if you are eligible. Here is some more information about this business deduction:
Rules and Information About the 179 Tax Deduction
Instead of taking your property and deducting and depreciating the property over many years, the section 179 deduction will allow you to deduct the entire cost of the property in the year you purchase it. There are some things that you will need, however, in order to qualify. For instance, the property that you buy must be used for your business at least 50% of the time. It also much be purchased from a third party source that is not related to the business.
Each designation of a 179 tax deduction will be made on a property by property basis and there is a limit of $125,000 on the deduction that you can make each year. There are other factors that will go into this, as well, so make sure to talk to your accountant to make sure that your business is eligible.
Property That May Be Used for the 179 Tax Deduction
There is a lot of different types of property that can be used for the 179 tax deduction. You can use both new and used property for this deduction, however, if the property had been used exclusively for personal use in the past, it will not be eligible. Some of the things that you can use for this deduction include automobiles, computers, livestock, machinery, office equipment, software, movable signs and much more. You should note as well that there are property types that cannot be used. For example, buildings cannot be used for the 179 tax deduction. If you are questioning whether or not a property can be used for a tax deduction, it will always be best to talk to your accountant.