Section 179 Benefits for Los Angeles Businesses
It’s still December and a little too early to think about taxes, right? Actually, with just a little time left in 2021 to acquire equipment and software, now is the perfect time to determine how your Los Angeles business can take advantage of Section 179 and bonus depreciation on your 2021 tax return.
Section 179 of the IRS Tax Code encourages businesses to invest in their growth by providing tax deductions on qualifying purchases. With current IRS incentives available, your Los Angeles business can reduce its taxes and gain much-needed equipment and software, ultimately putting your business in a better position to increase its efficiency and productivity.
Section 179 Benefits for Los Angeles Businesses
Section 179 Explained
Section 179 is an incentive for businesses to purchase, finance, or lease qualifying equipment and software. Under Section 179, there are limitations on the types of hardware and software businesses can purchase, lease, or finance( as well as the amount that can be deducted).
Section 179 Tax Deductions and Limitations
Businesses can apply Section 179 deductions for their first $1,050,000 of qualifying purchases. Any amount over $1,050,000 (up to $2,620,000) can be taken in bonus depreciation. The Section 179 tax deduction means that small and medium-sized businesses in Los Angeles can acquire significant savings.
If purchased equipment costs more than $2,620,000, then the Section 179 deduction decreases at a rate of dollar for dollar. The deduction will reach zero when the cost of equipment reaches $3,670,000.
Does Your Los Angeles Business Qualify for Section 179 Benefits?
Any Los Angeles business that purchases, finances, and/or leases new or used business equipment during the tax year can qualify for the Section 179 deduction. Section 179 benefits for Los Angeles businesses will apply if less than $3.5 million is spent on equipment and/or software.
In order to qualify for the Section 179 tax deduction, the equipment must be used for business purposes more than 50% of the time. The equipment must also be placed into service by midnight, December 31st.
What Qualifies under the Section 179 Tax Deduction?
The equipment and software Los Angeles businesses purchase must last over one year. Business equipment that qualifies under Section 179 (including, but not limited to).
Workstations, servers, backup devices, hard drives, telecommunications systems, etc.
Any of the equipment listed above that can no longer be considered as ”new”.
Software that’s publicly available and hasn’t been custom engineered. Software must be used for business purposes and put into use for at least one year.
Benefits of Upgrading Your Business Technology with the Help of Section 179
By upgrading your Los Angeles business’s technology, your business will not only save a significant amount of money, but you will stay ahead of the competition. With much-needed upgrades to your business technology, employee productivity will increase, resulting in less downtime and interruptions.
If you have not made any significant investments in new technology in a while, your equipment and software could soon become outdated. Investing in technology and software and making the most of the Section 179 deductions is a major opportunity.
One of the benefits of Section 179 for Los Angeles businesses is that it provides the momentum businesses need heading into 2022 with upgrades for equipment and software. Section 179 continues to make an impact on Los Angeles businesses by giving them the ability to write off the entire cost of qualifying equipment. Are you ready to maximize your purchasing power and lower your operating costs by taking advantage of the Section 179 tax deductions?
Before your business makes any changes to your environment, be sure to consult our team at Generation IX. We want to make sure Los Angeles businesses make the right additions and subtractions.
Thanks to Ulistic HPC team member, 4BIS.COM, a Cincinnati IT services company for their help with this article.
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