Earlier this month Congress passed the 2014 tax bill that renews the Section 179 Deduction for businesses. At a glance, Section 179 means this:
- The deduction limit for new and used equipment, as well as off-the-shelf software is set at $25,000.
- The maximum amount that can be spent on equipment and software and deducted as that accelerated rate is $200,000. You can spend over the maximum amount, but the available deduction starts to be reduced.
What can it mean for your business? When your business purchases qualifying equipment or software, rather than having to writing the purchase off over a number of years, you are able to write it off in the current year. The main driver for the 179 deduction is to give businesses a reason to invest in themselves, purchase equipment and move the economy forward. For most businesses, the entire cost of qualifying purchases can be written-off this year.
While it’s true that Congress didn’t give you much time to take advantage of this write off, it is definitely worth looking into. A list of qualifying equipment can be found here as well as a list of qualifying software here. As always, check with your tax advisor on whether your organization qualifies. Maybe there is still time to take advantage of Microsoft’s “Three 4 Less” promo to add NAV users while saving 15% and taking advantage of the Section 179 depreciation. For more info, check out Section 179.org.