Time is running out to use the tax deductions available to you with the Section 179 tax law. You have until December 31st if you want to use those deductions this year.
Many small business owners look for ways to maximize deductions to minimize how much tax they pay – and for a good reason. One thing that not everyone knows about that could help is the tax code Section 179. If you’re unaware of what Section 179 is, this post will help you. We’ll explain everything you need to know about tax 179 deductions and how you can take advantage of it using your MSP, and we’ll even have a short quiz at the end!
This law applies to deductions for property depreciation. It doesn’t increase how much you can deduct overall, but it does give smaller businesses the option to act more quickly. The use of assets by some businesses can last up to 39 years. Section 179 means that a company can declare the deduction of this asset in one year alone instead of spreading over a longer time. Let’s say, for example, that Urgent Care buys a new $4000 television. Based on a TV’s life of 10 years, straight depreciation would allow the business to deduct a percentage every year for ten years. With Section 179, the entire amount is deductible the first year.
When you set up a new business, you have a lot more going out than you do coming in, and there are a lot of assets that need to be purchased. Section 179 tax law means that new business owners can take advantage of deducting their purchases straight away. Smaller but established businesses can also take advantage of buying new assets to help grow their company. Buying things upfront is costly, so with Section 179 tax law this outgoing is less burdensome. In addition, you don’t have to wait many years to benefit from tax deductions when you purchase assets.
You can claim tax deductions for assets that will last over one year (as determined by the IRS). This list includes:
An MSP can help you maximize your tax savings from Section 179 tax law. In addition, they will be able to guide you through the options for your hardware and software needs. Finally, they can help forecast your business’s future needs in terms of technology, including finance or lease services, equipment, and purchases.
If you answered ‘yes’ to the four questions, your business might be eligible to claim the deduction. You will need to complete Form 4562 (part 1) and describe the property, how much it costs, and how much of Section 179 tax law you’re claiming.
Finally, you cannot claim Section 179 tax law if you acquired the asset from someone related to you, including businesses, charitable organizations, and trusts with which you have a relationship.
If you have any questions about this deduction or anything else, remember that you can contact us anytime. We’re here to help!