R & D Industries, Inc. and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide (nor should it be relied on for) tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisers before engaging in any transaction.
Deduct The Cost of New Equipment From Your Taxes
Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software that is purchased or financed during the tax year from gross income subject to restrictions. Please consult your Tax professional for details.
Download FlyerThe Section 179 Difference
Below is an example of why it is beneficial to take advantage of Section 179. The example shows the difference between a company that doesn't use Section 179 and a company that does take advantage of Section 179.
Taxes When You Don't Invest in Your Business
The graph below shows a company that ends the year with a $10,000 income. When it's time to pay taxes on the income, the company pays 50% of the income, or $5,000 to State and Government Taxes. This leaves the company with an end value of $5,000 after taxes.
Taxes When You Invest in Your Business & Use Section #179 Expense
The graph below shows the same company as above. Once again the company ends the year with a $10,000 income. This time the company decides to take advantage of Section 179 and invests in the company by purchasing some new technology for $6,000. This reduces the company's income to $4,000 at the end of the year. When it's time to pay taxes on the income, the company pays 50% of the remaining income, or $2,000 to State and Government Taxes. After taxes the company is left with $2,000 in income plus the $6,000 in equipment, making the company's end value $8,000. That's $3,000 more than the company ended with when it didn't take advantage of Section 179.
