Section 179 Tax Savings
Section 179 of the I.R.S. tax code offers significant deductions on qualifying business vehicles.
What business vehicles may qualify?
You may qualify if you:
Are a business that purchased or financed qualifying new or used business equipment, including certain business-use vehicles, during the 2020 tax year.
Put the equipment into service between January 1, 2020, and December 31, 2020.
Used this equipment for business purposes more than 50% of the time.
Spent less than $3,500,000 on this equipment.
How much could I deduct?
With the passage and signing into law of H.R.1, aka, The Tax Cuts and Jobs Act, the deduction limit for Section 179 increased to $1,000,000 for 2018 and beyond. You cannot write off more than $1,000,000.
The total amount of the equipment purchase cannot be more than $2,500,000. It phases out dollar-for-dollar after that, so once $3,500,000 is spent, the deduction goes away entirely.
Section 179 Highlights
Section 179 allows qualifying businesses to deduct up to the full purchase price of certain new or used vehicles, equipment and/or software purchased and placed into service during the tax year.
To qualify, the percentage of business use for the vehicle, equipment or software must be more than 50%.