The current limit for Section 179 is $25,000. In years past, this limit has been restored last-minute but only with the actions of our senators. Read below to find out more about Section 179 and what you need to do to get the amount raised.
Quick facts about Section 179
- Section 179 is a tax code created to help businesses. By allowing businesses to deduct the full amount of the purchase price of equipment (up to certain limits), Section 179 is a fantastic incentive for businesses to purchase, finance or lease equipment this year.
- Section 179 is valid on most types of equipment. There is little sense in allowing a deduction on only obscure equipment, so Section 179 is aimed at general business equipment as well as off-the-shelf software. If you use it in your business, it probably qualifies. See a list of qualifying Section 179 equipment.
- Section 179 can greatly help your bottom line. By deducting the full cost, you lower the amount you pay for equipment and/or software substantially. And these benefits can be further expanded if you choose tolease or finance your equipment & software.
- Section 179 is simple to use. All you need to do is buy (or lease) the equipment, and use a special IRS form. That’s it. Details here.
- Section 179 enhancements typically expire at year’s end. The various Stimulus Acts over the past few years have included special provisions for Section 179 and Bonus Depreciation, and greatly increased the limits on how much businesses could deduct. But the enhancements usually expire at the end of the year.
- There is simply no better time than now to take advantage of Section 179 and Bonus Depreciation. Why? Because it is a Use-It-or-Lose-It write-off that ends December 31st.
Reach out to your senator. In order to get the write-off amount raised, we need your help. Below is a letter template you can use to send to your senator.
The Honorable [Senator Name]
United States Senate
Washington, D.C. 20510
Via Electronic Mail
Dear Senator [Name]:
My name is [insert owner name]. As a voter and tax payer, I am writing to urge you to pass tax legislation which will allow myself to do business in an economically and environmentally responsible way.
The Section 179 tax deduction for 2015 is currently limited to $25,000 and the deduction’s phase-out begins with $200,000 of assets placed in service during the calendar year. These rates are too low to have a significant impact. The demand on farmers to increase crop growth has led to significant technological innovations. As such, many key pieces of agricultural equipment used by today’s farmer, such as tractors, cost several hundred thousand dollars. For tax years 2009 through 2014, Section 179 provided agricultural businesses and farmers with a deduction for the first $500,000 of qualified assets placed in service during the year and the deduction began to phase out if the taxpayer’s cost of qualified assets placed in service during the year exceeded $2,000,000. Tax incentives at these levels encourage farmers to invest in newer technology that will improve crop yields and which have a less harmful effect on the environment. In addition to Section 179 deductions, bonus depreciation incentives previously allowed business owners to accelerate the deductions of investments; equipment purchasers taking advantage of bonus depreciation obtained a 50% deduction in year one, rather than over the seven year agricultural equipment depreciation schedule period. Bonus depreciation and appropriate Section 179 levels were allowed to expire at the end of 2014.
Last year, Congress waited until just days before the end of 2014 to implement Section 179 and Bonus Depreciation retroactively for the calendar year. This small window of time did not given many would-be customers enough time to plan and evaluate the needs of their businesses for purposes of purchasing equipment. Congress’ continued refusal to pass these incentives prior to December of 2015 again undercuts the very purpose of the provisions and will unnecessarily hamper the intended impact. As such, I ask that you support an increase in Section 179 levels to those passed in 2014 and that you re-authorize 50% bonus depreciation for a minimum of two years for both incentives. In addition, I ask that you shorten the depreciation schedule for agricultural equipment to five years (from seven) to encourage capital expenditures, grow jobs and the economy, and to help incentivize the operation of ecologically and economically responsible equipment in the agricultural industry.
I welcome the opportunity to speak with you about the impact of these incentives on my business.
Very Truly Yours,