There are many different kinds of tax codes that can help benefit your business in a big way. Taking advantage of these tax codes allows you to get more money back so you can put it into your business again and continue to grow. If you do not know about the tax codes, though, how can you use them?
Section 179 is a tax code that is fairly easy to understand that can benefit your business. Section 179 was created to help businesses by allowing them to deduct the full amount of the purchase price for any equipment for the business. There are some limitations to this and you can only deduct up to a certain amount, but that is a huge tax break. It allows businesses to finance, purchase, or even lease equipment that they may not have been able to afford otherwise.
What Kind of Equipment Can you Use it On?
While this tax break is valid for a majority of the types of equipment available on the market, there are limitations. As a general rule of thumb, if you use the equipment for your business, it will likely qualify. Section 179 will only apply to equipment that is used in business but it also allows for off-the-shelf software. You can learn more about what is and is not qualified here.
Using it to Help Your Bottom Line
With this tax break, you can essentially purchase equipment at no cost. You simply have to pay for it up front and wait to get reimbursed at the end of the year when you file your taxes. Your bottom line is something that you likely look at on a regular basis and you can improve upon it by purchasing equipment you will need anyway but not paying for it. This tax break is a no brainer and is an incentive to go ahead and purchase any equipment you may need in the future.
When Should You Take Advantage of Section 179?
Honestly, the best time to use this tax break is now. There are enhancements to the program fro this year that will expire on December 31st. The enhancements this year include special provisions and Bonus Depreciation. That means that the limits that are set for the amount you can deduct have been increased. This year, you can purchase a lot more and still deduct it than you likely will be able to do next year. Since these enhancements expire at the end of the year, there is no guarantee that they will be there next year for you to take advantage of. However, Section 179 will still be in place, you just may not have as much room for deductions. Also, if you have purchased equipment this year, you have to claim the tax break this year otherwise you will lose the benefit. You cannot carry previous years purchases over to the next year.
How to Use It
Actually taking advantage of the tax break is very easy. To do so, all you have to do it purchase ot lease the equipment and then use a special IRS form with your taxes. A tax break has never been so easy.
There are substantial benefits for this tax break and it would not be smart to ignore it, especially if you need equipment this year or next year. For more information about how Section 179 can help you in New Jersey or to take advantage of it this year, be sure to contact Outsource My IT via (973) 638-2722 or email@example.com. We want to make sure you get the most out of these benefits for your business