What is Section 179?
Section 179 allows businesses who finance to write off full equipment costs in the year they buy it rather than capitalizing costs over the useful life of the equipment and waiting years to receive deductions.
How it works!
Say your customers bought a $10,000 piece of equipment for their business. Under normal depreciation rules, they would only receive a portion of the cost in deductions each year over its useful life. Now, under Section 179, they can deduct the entire $10,000 from their net income in the first year they own it. So, assuming a 35% tax bracket, they will have a tax savings of $3,500, meaning a lowered cost of equipment to 6,500!