Section 179 Tax Deduction Has Two Important Enhancements
Thinking about purchasing equipment in 2018?
The Tax Cuts and Jobs Act of 2017 includes two significant business related tax incentives that may lower your cost of investing in new foundry equipment.
- Expanded Section 179 Deduction Limit for Small Business:
The allowable Section 179 deduction has increased from $500,000 to $1 million. The maximum asset spending phase out has also increased from $2 million to $2.5 million.
- 100% Bonus Depreciation for all businesses:
The new rules doubles the bonus depreciation from 50% to 100%.
Bonus depreciation applies to both new and used equipment (typically after meeting the phaseout spending cap).
Special Enhancements for Small Business
In 2018 small businesses can deduct $1 million of capital equipment purchases in the first year.
- Deduct the full purchase price of qualifying equipment (purchased or financed) during 2018. This means if you buy a piece of qualifying equipment you can deduct the full purchase price from your gross income.
- You can qualify to claim this expense if you purchase less than $2.5 million of capital assets during 2018. Once you meet the $2.5 million cap, the deduction begins to be reduced.
NOTE: This message does not constitute tax or legal advice whatsoever. Contact your tax professional to see how these revisions apply to you.
One quick way to help your foundry this year is to consider EMI’s reconditioned inventory of mold and core machines – many which carry warranties backed by EMI. Any one of these machines can be installed and operational before the end of the year, meeting Section 179 eligibility requirements!