IRS Section 179 Depreciation Deduction

Section 179 of the IRS code was created to help small businesses by allowing for depreciation deductions for certain purchases in one year rather than depreciating them over a longer period of time. For example, if your company purchases a new server, some desktops, a new company vehicle, or other office equipment – section 179 allows you to deduct the full cost of that equipment in one year, rather than depreciating them over a longer period of time. The annual limits on Section 179 are $500,000 on individual items of new and used equipment. This includes boxed software purchases. Your company can spend up to a maximum of $2,000,000 to receive the benefit.


Section 179 Calculation Example
Source: Section 179 Calculation Example


How to take advantage of Section 179

When you buy equipment and put it into production be sure to save your receipt since you will be required to provide the date of purchase, the date it was put into production, and all other associated costs like shipping and implementation services. Take this information to your tax professional and using the IRS Form 4562, submit the total deductions to the IRS.



How To Depreciate Property – Publication 946

Form 4562 Depreciation and Amortization

Instructions for Form 4562




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