What is tax code 179?
Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and software purchased or financed during the tax year. That means that if you finance or lease a piece of equipment, you can deduct the FULL PURCHASE PRICE from your gross income.
Who Qualifies for Section 179?
Businesses that purchase, finance, or lease new or used business equipment during the tax year should qualify for the Section 179 Deduction (assuming they spend less than $3,630,000).
Advantage of Tax Code 179
The main Advantage of Financing or leasing equipment is that you can deduct the full amount of the equipment and/or software, without paying the full amount this year. The amount you save in taxes can actually exceed the payments, making this a very bottom-line friendly deduction. In many cases, the tax savings from the deduction will make your bank account larger than if you never financed the equipment in the first place.