When running a small business, it is critical to get your taxes right. Many small business owners look for ways to maximize deductions to minimize how much tax they pay – and for a good reason. One thing that not everyone knows about that could help is the tax code Section 179. If you are unaware of what Section 179 is, this post will help you. We’ll explain everything you need to know about tax 179 deductions and how you can take advantage of them with help from your MSP.
Section 179 – the basics for SMB Tax deduction
This benefit applies to deductions for property depreciation. It won’t increase the amount you can deduct overall, but it does give smaller businesses the option to act more quickly. In some cases, a new asset can be used for up to 39 years. Section 179 means that a company can declare the deduction of this asset in one year alone instead of spreading over a longer time. Let’s say, for example, that a bar buys a new $4000 television. If the TV is used in the bar for ten years, then straight depreciation would mean the business could only deduct a percentage of the expense yearly, for ten years. With Section 179, the business owner can deduct the whole amount in the first year.
Why is this useful to small and newer businesses?
When you set up a new business, you have a lot more going out than you do coming in, and there are a lot of assets that need to be purchased. Section 179 means that new business owners can take advantage of deducting their purchases straight away. Smaller but established businesses can also take advantage of buying new assets to help grow their company. Buying things upfront is costly, so with Section 179, this outgoing is less burdensome. In addition, you don’t have to wait many years to benefit from tax deductions when you purchase assets.
What assets qualify for Section 179?
These tax deductions can be used for business assets that will last over one year (as determined by the IRS). This includes:
- Office furniture
- Business equipment
- Business vehicles
Tax 179 Write-off MSP – How can they help?
An MSP can help you maximize your tax savings from Section 179. In addition, they will be able to guide you through the options for your hardware and software needs. Finally, they can help forecast your business’s future needs in terms of technology, including finance or lease services, equipment, and purchases. Contact us to find out more about how we can help you.