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If you’re not taking advantage of the benefits Section 179 provides this tax season, your business could be leaving money on the table.
Section 179 allows small businesses that purchase, finance, and/or lease eligible items to deduct 100% of the cost, up to $1,160,000 (an $80k increase from last year), during the first year it was put into service for the business. And it’s not just machinery or office equipment that qualify; the deduction includes software. 2023 marks the largest deduction ever offered to businesses and should not be missed.
Taking the cost of these items as an immediate expense deduction allows your business to get a quick break on your tax burden, whereas capitalizing and then depreciating the asset allows for smaller deductions to be taken over a longer period.
Have you been considering upgrading your software? Now is the time to save while taking advantage of an easier way to work. In addition, businesses can take advantage of 80% bonus depreciation on both new and used equipment for the rest of 2023. This is an additional benefit if you need new computers, printers, or tech equipment.
Over the years, this write-off has made a big difference for many businesses that now need new equipment or software but put it off due to the lack of available money. With the year ending, it’s essential that you capitalize on this money-saving tax credit while upgrading your business with the resources you need to continue to grow and stay competitive.
Remember that to qualify for the Section 179 Deduction, purchases must be bought and put into use between January 1 and December 31 of the tax year you are claiming.
Check out this fully updated 2023 Section 179 Calculator, or speak to your financial advisor to see how the Section 179 tax deduction can benefit your company in 2023. Learn more info on Section 179.
Editor’s Note: This post was originally published on November 21, 2022, and has been revamped and updated for accuracy and comprehensiveness.
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