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Tax Deduction on Equipment Used for Business

Clark Heintz Tools & Equipment LLC encourages you to strike while the iron is hot! With the Section 179 Deduction, Tax breaks are offered for equipment purchased for professional use. Buy before year end and get your tax break. IRS tax code's Section 179 enables businesses to deduct the full purchase price of *qualifying equipment and/or software purchased or financed during the tax year. So, if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. This incentive was developed by the government to encourage businesses to invest in themselves, e.g.,  buy equipment to help further their businesses.

Section 179 at a Glance for 2016:

2016 Deduction Limit = $500,000
This deduction applies to off-the-shelf software as well as new and used equipment. This limit is only good for the year 2016, and the equipment must be purchased or financed and put into service by the end of the day, 12/31/2016.

2016 Spending Cap on equipment purchases = $2,000,000
This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced on a dollar for dollar basis. This spending cap makes Section 179 a genuine "small business tax incentive."

Bonus Depreciation: 50% for 2016
Bonus Depreciation is generally taken after the Section 179 Spending Cap is reached.

Note: Bonus Depreciation is available for new equipment only.

This is a quick, simplified view of Section 179 Deduction for 2016.