Section 179 at a Glance (updated for 2015)

Section 179 of the U.S. IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. Section 179 is an incentive created by the U.S. government to encourage businesses to invest which would in turn stimulate the economy.

The section 179 deduction is available for most new and used capital equipment. You can apply up to $25,000.00 of capital investments to tax code section 179 in 2015. While lower than previous years, this tax benefit is still highly advantageous. The section 179 deduction can also include costs directly associated with the installation of qualifying capital equipment (e.g., installation, training, and delivery).

Stay tuned if the expanded Section 179 limits are restored to higher limits by Congress in 2015.

Companies should consult their tax adviser to confirm eligibility for tax benefits.

Price of Equipment:
First Year Write Off: ($25,000 maximum in 2015) $25,000.00
50% Bonus First Year Depreciation (currently not available this tax year): $0.00
Normal First Year Depreciation: $15,000.00
Total First Year Deduction: $40,000.00
Cash Savings on Your Equipment Acquisition (assuming a 35% tax bracket): ($14,000.00)
Equipment Cost after Tax: (assuming a 35% tax bracket): $86,000.00

DISCLAIMER:  The calculator presents a potential tax scenario based on typical assumptions that may not apply to your business. This page and calculator are not tax advice. The indicated tax treatment applies only to transactions deemed to reflect a purchase of the equipment or a capitalized lease purchase transaction. Please consult your tax advisor to determine the tax ramifications of acquiring equipment or software for your business.  The amount of previous depreciation your company may have used may affect your ability to utilize the elections. Please consult your tax adviser or accountant for additional information. Equipment must be purchased and placed in service by 12/31/15.

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