At the end of each year, we remind readers that U.S. taxpayers still have time to take advantage of the Section 179 depreciation deduction. But this time around, we are getting the word out a bit earlier.
COVID-19 has changed the way we live and work in many ways. And with more people shopping online than ever before, shipping times are a bit longer. So, it’s important to make your year-end purchases sooner rather than later if you plan on depreciating your MacSales.com purchases!
What is Section 179?
To put it simply, Section 179 allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy or lease qualifying equipment, you can deduct the full purchase price from your gross income. Taking this deduction isn’t mandatory, but if you don’t take it for the year the equipment is purchased, you don’t get another chance.
You cannot take a Section 179 deduction that is larger than your taxable income, but if your order is financed, in place, and in-service by 11:59 p.m. on Dec. 31, you can get the benefits in time for your 2020 taxes. Pair that with what you can save with our Holiday Specials, and you can make an already great deal even better!
How is Section 179 Affected by COVID-19 Financial Assistance?
Eligibility for the Section 179 tax deduction for 2020 is unaffected by any pandemic-related financial assistance a business may have received (e.g., PPP Loans). In other words, if a company received a PPP loan or any other Pandemic-related assistance, they may still claim their Section 179 Deduction.
“The Section 179 tax deduction is unaffected by any other government program a company may have participated in. For example, if a company received a forgivable PPP loan due to COVID-19 affecting their operations, they are still eligible to claim a Section 179 tax deduction provided they (a) purchased eligible equipment and put it into service by December 31, and (b) have a taxable income after any adjustments pertaining to the programs they participated.”Source: section179.org
Of course, this blog post is just a friendly reminder. The Rocket Yard, OWC, and MacSales.com do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide—and should not be relied on for—tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.
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