2021 Deduction Limit = $1,050,000
This deduction is good on new and used equipment, as well as off-the-shelf software. To take the deduction for tax year 2021, the equipment must be financed or purchased and put into service between January 1, 2021 and the end of the day on December 31, 2021.
2021 Spending Cap on equipment purchases = $2,620,000
This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced on a dollar for dollar basis. This spending cap makes Section 179 a true “small business tax incentive” (because larger businesses that spend more than $3,670,000 on equipment won’t get the deduction.)
Bonus Depreciation: 100% for 2021
Bonus Depreciation is generally taken after the Section 179 Spending Cap is reached. The Bonus Depreciation is available for both new and used equipment.
What is the Section 179 Deduction?
Section 179 was designed with businesses in mind. That’s why almost all types of “business equipment” that your company buys or finances will qualify for the Section 179 deduction.
All businesses need equipment on an ongoing basis, be it machinery, computers, software, office furniture, vehicles, or other tangible goods. It’s very likely that your business will purchase many of these goods during the year, and will do so again and again. Section 179 is designed to make purchasing / leasing that equipment during this calendar year financially attractive.
How much money can Section 179 save you in 2021?
The Section 179 Deduction has a real impact on your equipment costs. Use the calculator available on the official Section 179 website to see how much your tax liability can be reduced.