Nobody is thrilled to pay taxes, but we need to do it. As both businesses and individuals, our tax dollars keep society moving at the local, state, and federal level.
Still, taxes create a little fun for small business owners now and then. This time of year, you get to muse on what to do with Section 179 tax incentives. For those of us in heavy metal manufacturing, that could even mean new circular cold saws or ironworkers.
Section 179 Deductions
Section 179 tax deductions allow businesses to invest back into their companies, and that's exactly what you could do with a new Scotchman machine.
The current Section 179 tax deduction limit is $500,000 according to section179.org, so we're talking serious tax relief for those who qualify. But both software and equipment need to be financed and in place by midnight on December 31, 2017 to qualify.
Section 179 Leases
So why are we telling you about this?
For businesses doing heavy metal manufacturing, Section 179 allows you to deduct the full purchase price of qualifying machines and equipment that is purchased or leased during the tax year.
Doesn't that sound like the perfect excuse to shop for cold saws and ironworkers?
Even if you aren't ready to purchase a machine, we have leasing options that comply with Section 179 rules:
"Did you know that your company can lease equipment and still take full advantage of the Section 179 deduction? In fact, leasing equipment and/or software with the Section 179 deduction is a preferred financial strategy for many businesses, as it can significantly help with not only cash flow, but with profits as well." (Section179.org)
And those leases can include heavy metal manufacturing equipment.*
Sounds great, right? It is! Here's the fine print you need to know and understand.
Using Section 179 for Heavy Metal Manufacturing
Here are the key Section 179 provisions for farmers and small business owners to know:
- To qualify for Section 179, equipment must be used at least 50% for business.
- For 2017, the amount that can be written off caps at $500,000.
- Total amount purchased is limited to $2,000,000. The deduction begins to phase out dollar-for-dollar after $2,000,000 is spent by a given business, making it a true small and medium-sized business deduction.
- Qualifying heavy metal manufacturing equipment for Section 179 can be either purchased or leased.
- You can't claim Section 179 on a machine you purchased for personal use in a previous year, even if you change its purpose to business later.
- Machinery & equipment MUST be in place by midnight Dec. 31, 2017.
Read more about property that qualifies for section 179 leases and purchases.
Ready to Take Advantage of Tax Deductions on Machines for Your Business?
Remember: You must have your Section 179 equipment purchased or leased and in place before midnight on December 31, 2017.
Sometimes, leasing options are the best route for a heavy metal manufacturing company's financing of one of our American-made products.
Please consult your tax expert for all details. For questions about our inventory, our knowledgeable customer service staff is ready to clear things up.