If you are like us and own your own business, filing taxes is a constant juggling of how to grow your business and yet pay your reasonable share of what you owe. You are hopefully aware of what we’re about to share as the end of the year draws closer. In that case we should only be reminding you about getting your tax credit on purchases up to $2 Million prior to year’s end. Of course, we have trailers, containers and even some vehicles which fall well within those ranges. View our inventory or contact us to get started. If this is all news to you then read on.
The deduction is referred to as Section 179 of the U.S. Tax Code. Though it may sound complicated to most of us, a very helpful resource at www.section179.org aims to demystify the whole business deduction process. They summarize the business deduction this way:
Essentially, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. It’s an incentive created by the U.S. government to encourage businesses to buy equipment and invest in themselves.
Though the scope of this deduction has been narrowed down in recent years, all of the equipment which we support and sell should fall into the category of business deduction. Be aware though that to take the deduction you will need some sort of business license and possibly a Tax ID number for your business. What qualifies for this deduction has been abused in the past so you will want to contact a tax professional to make sure you are covered. Despite the narrowing of the business expense definition, it is very likely to remain a strong foundation of our tax code for years to come.
Be aware though there are limits. There is a cap of $2 Million of value you can take. Above that, and for 2016 at least, you can take 50% depreciation above the cap. According to the site adn the tax code, the deduction applies to both new and used equipment while the 50% depreciation is only for new expenses. The used equipment simply has to be new to you.
The tank trailers and flatbeds we sell or lease certainly qualify as items used in business. The containers could qualify depending on your business use of them. Be prepared to prove the business use of those boxes if it ever comes up. Click here for the full list of qualifying equipment and property.