As the fiscal year winds down to an end, many businesses may find that they have a surplus in their “use it or lose it” budgets. These types of budgets generally lead to inflated expenses on the 4th quarter balance sheet, but, due to recent incentives, this excess spending can bring about huge tax reliefs for the current year.
Section 179 is a generous tax deduction that allows businesses to purchase necessary equipment like water jet cutting machines, lasers, plasma cutters and more, and deduct the full amount from their gross income on this year’s taxes. The list of qualifying equipment includes machinery, computers, office furniture, vehicles, off-the-shelf software, and other tangible goods. The deduction applies to both new and used (as well as most leased or financed) equipment, and covers purchases up to $510,000. For any new equipment purchased in excess of $510,000, a one-time first year bonus depreciation is offered at a rate of 50%, up to $2.03 million, on top of the normal first year depreciation rate.
This tax incentive is advantageous to both large and small businesses alike, as it allows them to write off the entire purchase on the current year’s taxes, instead of depreciating the equipment over the course of multiple years.
Section 179 applies to all WARDJet waterjets as well as the CAM software that we offer to our customers such as WARDCAM or IGEMS. In order to take advantage of this tax deduction, businesses must purchase and implement the equipment between January 1st, 2017 and December 31st, 2017. So, if you were thinking about adding a water jet cutting machine to your shop this year, now would be a good time to seriously consider it.
For more information on Section 179, including a potential savings calculator, visit www.section179.org.