Because it’s December and we are nearing the final days of 2023, we’ve been doing a bit of housekeeping here on the Rocket Yard blog. In addition to reminding you about holiday shipping cutoff dates to make sure you get your orders from macsales.com on-time for Christmas, it’s also that time of year where we remind all of our customers about Section 179 tax breaks.
After all, the Section 179 depreciation deduction can save your business or the company you work for up to 37% on your equipment purchase.
If you’re a U.S. taxpayer, you still have time to take advantage of the Section 179 depreciation deduction. With those holiday shipping cutoffs quickly approaching, 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?
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.
Plus, the equipment you purchase can be new or used!
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 December 31, you can get the benefits in time for your 2023 taxes.
How Much is the Section 179 Deduction for 2023?
The Section 179 deduction for 2023 is $1,160,000—a 7% increase from 2022.
According to the Section 179 website, this means “U.S. companies can deduct the full price of qualified equipment purchases, up to $1,160,000, with a ‘total equipment purchase’ limit of $2.89 million (up from $2.7 million in 2022.)”
How Much Money Can Section 179 Save My Business?
So, how much money are we talking about saving here? Depending on your purchase, a substantial amount. The benefit of this deduction can amount to a realized discount of up to 37%.
You can head here to the Section 179 website to use a calculator that will estimate your tax savings and find more information on how to make sure you get the deduction.
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.