New 2016 Annual Deduction Limit Increased to $500,000
Section 179 – New PATH Act Benefits Small & Medium Businesses
Significant Tax Savings Available*
The new law was signed into effect in mid-December. *Obviously, confirm with your tax advisor the benefits to your situation.
It provides a $500,000 permanent increase in 2016 to the Section 179 Allowance for Deduction, and provides additional increases each year for inflation.
This means YOUR business purchases of equipment* via cash or finance agreements, including bargain option leases may write off, the entire cost of the purchase up to $500,000.
Once total equipment purchases exceed $2,000,000- the Section 179 allowed amount is reduced dollar for dollar.
Section 179 Example:
Equipment Purchased: $80,000
Section 179 Deduction Taken: $80,000
Company Tax Bracket: 35%
Tax Shield Savings: $28,000
True, After Tax Cost: $52,000
*Equipment Allowed
The list below is meant as a general guide to equipment that may be expensed under Section 179.
- Machinery
- Computer Systems and Networks
- Telephone Systems
- Healthcare and Medical Equipment
- Patient Flow Communications & Nurse Call
- Small buses
- Security Systems
- Off the Shelf Software
- Office Furniture and FFE