Section 179 Tax Deductions for 2023IT Resource
As we approach the end of 2023, it’s an opportune time to strategize how to alleviate your overall tax burden. If upgrading your equipment, software, business vehicles, or office furniture has been on your agenda, the time to act is now. Section 179, a tax incentive program, empowers business owners to deduct specific technology expenses, thereby offsetting the purchase costs. Seize this excellent opportunity to maximize your purchasing power by claiming a substantial tax deduction on qualifying equipment and software. However, it’s crucial to note that to qualify for these deductions, purchases must be made before the year’s end.
What’s new in 2023?
The Section 179 deduction for the year 2023 has increased to $1,160,000, marking an $80,000 increase from the previous year. This means U.S. businesses can deduct the entire price of eligible equipment purchases, up to $1,160,000, with a total equipment purchase limit of $2.89 million (up from $2.7 million in 2022). In addition, businesses can take advantage of 80% bonus depreciation on both new and used equipment for the entirety of 2023.
When should you take action? Section 179 expires at midnight on December 31, 2023, underscoring the urgency to take action promptly.
What qualifies for a deduction? Most types of business equipment are eligible for a deduction, aligning with the original intent of Section 179. This provision is strategically designed to make purchasing and leasing equipment financially appealing throughout the calendar year. Some qualifying purchases include:
- “Off-the-Shelf” Software*
- Business Vehicles
- Equipment (machines) for business use
- Office Furniture and equipment
*Off-the-Shelf Software refers to any non-custom-designed software, readily available to the general public, and employed in your business as an income-producing activity.
How much can you save on taxes? The impact of Section 179 on your tax savings can be significant, depending on the scale of your planned purchases. Utilize the Section 179 calculator, entering your purchase price, to determine the applicable deduction.
What steps should you take now?
- Engage with your financial advisor or accountant to optimize your business’s utilization of this tax break.
- Reach out to our sales department to initiate the planning of these purchases. Act swiftly, as qualifying purchases must be ordered and put into service by December 31, 2023.
By capitalizing on Section 179, you not only lower operational costs but also acquire new equipment in the process. Deductions are a vital aspect for all small businesses, and this opportunity should not be missed.
Questions? Connect with our sales department, and we’ll guide you through the process.
*This article is sourced from information available on the Section 179 website at www.section179.org.