Year-end is quickly approaching and deciding on those year-end purchases is probably already on your mind. Section 179 of the IRS tax code is still allowing businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year.
The Section 179 deduction for 2022 is $1,080,000 (up from $1,050,000 in 2021). This means U.S. companies can deduct the full price of qualified equipment purchases, up to $1,080,000, with a “total equipment purchase” limit of $2.7 million (up from $2.62 million in 2021). The deduction includes both new and used qualified equipment. In addition, businesses can take advantage of 100% bonus depreciation on both new and used equipment for the entirety of 2022.
Given the significance of technology to the success of a business and overall digital transformation, we know how important it is to stay up to date on the latest tech trends which makes it the perfect time to buy or lease new state-of-the-art equipment, and deduct the FULL PURCHASE PRICE from your gross income (see qualifying items).
Please note that to be eligible for a 2022 Section 179 deduction, the eligible equipment must be purchased and put into service by midnight 12/31/2022. Please keep in mind the delivery times due to the continued supply chain/cost issues when buying as there are currently no plans to waive the “put into service” requirement so don’t wait… Remember to keep supply chain issues and delivery times in mind when making your Section 179 purchases for 2022.
The following items are a few that generally qualify for the Section 179 Deduction.
- Computer “Off-the-Shelf” Software
- Equipment (machines, etc.) purchased for business use
- Office Furniture
- Office Equipment
- Find the complete list here
Please note – the above equipment qualifies whether new or used (but must be new to you), regardless of whether it was purchased outright, financed, or leases that meet certain criteria to qualify. Workstations, servers, laptops, network devices, & software all qualify for the Section 179 Tax Deduction. If you’re interested in upgrading or adding on new computer equipment/software, the time to act is now!
Check out the 2022 Section 179 Calculator to see how the Section 179 tax deduction can benefit your company in 2022
PLAN AHEAD and CONTACT US TODAY! (You can also learn about leasing options we can help with)