The year is drawing to a close. So are your chances to get a Section 179 deduction that will save your small business some serious money.
When the clock strikes midnight, Section 179 will turn into a pumpkin. Today, you can get a deduction on up to $139,000 in equipment purchases, but when 2013 comes around that may shrink to as little as $25,000. That’s a huge difference, as Direct Capital has noted before.
If you’ve purchased any equipment up until now, or if you’ll have purchased or leased equipment delivered before the end of the year, this is perhaps your last opportunity to take advantage of significant tax savings. With the fiscal cliff looming and real concerns about rising taxes in the year ahead, it’s one of the biggest financial favors you can do your business at the moment.
It’s fairly simple to do. You just need to fill out IRS Form 4562 and list all eligible equipment for the deduction. That can include everything from earth-moving equipment like bulldozers down to computer software, but it’s worth checking out the IRS itself to see what and is not eligible. If you’ve filed correctly, everything falls under Section 179 and you’re under the deadline, you could get a nice deduction on that equipment. We really can’t recommend it enough.
What about those of you who aren’t purchasing equipment until 2013, though? Chances are you’re out of luck.
It is possible that Congress will act to save Section 179, perhaps even restoring the deduction totals to the $250,000 they were at in 2011. We just don’t consider it the most likely outcome, with Congress grappling with tax increases, the new and contentious health care law and spending cuts on the horizon that will command most of their attention. If there’s momentum on Section 179, it’s likely to come in 2014, after these issues have been sorted out.
There’s no time like the present, we say. Will you be filing for a Section 179 deduction in Q4?