Section 179 Accelerated Depreciation
Tax Advantages of IRS Code Section 179 Can Reduce Your Capital Equipment Costs
The concept of Section 179 is simple: to provide a valuable tax incentive to businesses so they can more readily invest in more equipment. In turn, it helps the vendors selling capital equipment, plus it eventually may drive hiring more employees to complete the work created by the purchased capital equipment.
The term capital equipment refers to long-lasting products or goods a firm acquires and owns, but does not consume in the ordinary course of business, including assets such as medical diagnostic devices. Section 179 helps drive economic growth in your community, region, state and nation and Section 179 has proven to be a valuable tool for economic stimulus.
IRS code Section 179 has been around in various forms for sixty years since its inception in September of 1958. In the past, Section 179 has had many deduction limits, even as low as $25,000. Now, Section 179 allows up to $1,000,000 in accelerated depreciation for qualified capital investments, if purchased and put into use between January 1 through December 31, 2019. Accelerated depreciation refers to the depreciation of fixed assets, such as medical devices, at a faster rate earlier during the asset's life.
Most capital equipment investments qualify, but always check with your accountant or CPA firm to make sure.
Prior to Section 179, you would typically deduct your capital equipment over seven years. Today, with the current terms of Section 179, you may deduct the full purchase price, up to $1,000,000, in the year of purchase, providing it is put into service in that same year. Section 179 also allows accelerated depreciation using some structures of equipment leases, even if your lease is a 60-month lease, you can deduct 100% of the capital equipment cost in the year of purchase and service. Again, make sure you discuss this with your accountant or CPA firm to confirm the lease you are considering qualifies.
In terms of dollars saved, what does that look like? Here's an example, let's use a capital equipment purchase of $35,000. Assuming your tax bracket is 35%, your tax savings would be $12,250, turning your $35,000 capital equipment purchase into a net equipment cost of $22,750.
At Secure Health, we work closely with Stearn's Bank as our lease vendor. Stearn's Bank offers Section 179 qualified leases with very flexible terms. If you are considering a VNG or any other products offered by Secure Health, more information is available. You can even complete Stearn's Bank simple online lease application for fast approvals.
Remember, to qualify for Section 179 in 2019, the capital equipment must be purchased and put into service by December 31, 2019. So don't delay, there is not much time remaining for this year.
If you have any questions about our products and services, please contact me at [email protected] or by calling 260.804.4041. I would appreciate hearing from you.
--Dan Scherer, CEO
Secure Health, Inc.
260.804.4041 or [email protected]