With the year’s end rapidly approaching, now is the right time to plan for taking advantage of the Section 179 tax deduction. This deduction allows our customers with their own landscaping, construction, and agricultural businesses to benefit from tax incentives while investing in business assets.
Through the Section 179 tax deduction, business owners are able to write off 100% of the purchase price of qualifying new and used equipment in the year of its purchase. This year, the incentive is applicable to equipment that is financed or purchased and put into use by the end of day on Dec. 31, 2021.
The 2021 guidelines allow expenses up to $1,050,000 to be written off, whereas asset expenses over $2,620,000 will begin to phase out dollar-for-dollar. To allow small to medium-sized businesses to benefit the most from this incentive, expenses exceeding $3,670,000 are not applicable for a deduction.
Additionally, equipment must be used for business purposes over 50% of the time to qualify for a Section 179 deduction. Your monetary amount of eligibility is found by multiplying the cost of equipment by the business-use percentage.
Here is an updated example of Section 179 at work during the 2021 tax year: