IRS Section 179

NEWS ALERT:  SECTION 179 IS $500,000 FOR 2016

The "Protecting Americans from Tax Hikes Act of 2015" (PATH Act) was passed by both the House and Senate and signed into law on 12/18/2015. This bill expanded the Section 179 deduction limit to $500,000 until further notice.



The PATH ACT passed in December of 2015 was also made retroactive for the 2015 tax year, making the Section 179 deduction for 2015 $500,000. In addition, the 50% Bonus Depreciation was reinstated.

Common Questions:

How Much Can I Save on My Taxes in 2016?
It depends on the amount of qualifying equipment and software that you purchase and put into use. See the handy calculator below.

What Sort of Equipment Qualifies in 2016?
Most tangible business equipment qualifies.

When Do I Have to purchase the equipment?
Section 179 for 2016 expires midnight, 12/31/2016. If you wish to deduct the full price of your equipment from your 2016 taxes and take advantage of the new higher deduction limits, it must be purchased and put into service by then.

Many businesses are finding Section 179 Qualified Financing to be an attractive option in 2016.

Tax Savings Calculator

Equipment Cost:
 

Sec 179 Deduction:

50% Bonus Depreciation:

Normal First Year Depreciation:

Total First Year Deduction:

Cash Savings:
(Assuming 35% tax rate)

Lowered Cost of Equipment
After Tax Savings:

Qualified Property

Non Qualifying

  • Real Property
    Real Property does not qualify for the Section 179 Deduction. Real Property is typically defined as land, buildings, permanent structures and the components of the permanent structures (including improvements). Other examples of property that would not qualify for the Section 179 Deduction include paved parking areas and fences.
  • HVAC
    Air conditioning and heating equipment is generally not eligible for the Section 179 Deduction.
  • Used Outside the US
    Property used outside the United States generally does not qualify for the Section 179 Deduction.
  • Acquired by Gift
    Property acquired by gift or inheritance, as well as property purchased from related parties does not qualify for the Section 179 Deduction (No, you can't sell equipment to yourself and qualify for Section 179).
  • Personal Property
    Any property that is not considered to be personal property, may not qualify for the Section 179 Deduction.
  • Used Equipment
    Used Equipment (that is new to you) qualifies for Section 179, however used equipment does not qualify for Bonus Depreciation.