All over the country, business owners are getting prepared for the end of year surge, and making sure their financial sheets are in order. There are multiple ways that owners can get tax breaks for their business. There is one specifically for small businesses called Section 179.
Let’s take small business owner, Michael Smith, as an example. Michael purchased a backhoe to use for his business for $250,000.00. The backhoe helped his business sky rocket, and he was acquiring clients left and right. He quickly started earning more and more revenue for his business.
2016 was coming to an end and Michael realized he needed to get his tax documents in order. As he went through his financials, he was concerned at the amount of taxes he had to pay for 2016, he knew that this was because his profit rose exponentially but wanted to try and lower his total due.
Michael did his research and learned about Section 179, a tax deduction that enables businesses to depreciate assets as an expense all in the first year and lower what they have to pay in taxes. All he had to do was fill out Part 1 of IRS form 4562 and attach it to his tax return. Using Section 179, Michael was able to save $87,500.00 on his taxes! Section 179 allowed Michael to reduce what he made for a profit which in turn lowered his taxes.
Michael’s story can be a reality for many small business owners as they head into the final months of the year. To learn more about Section 179, how to calculate your deduction, and what other benefits it can offer your business, download our free Section 179 Tax Guide and give us a call!