Lower Your 2022 Tax Liability with a Section 179 Deduction
Fall is in the air, which means the end of the year will be here before we know it and tax season right behind it. Maybe taxes aren’t top of mind for you yet, but Section 179 certainly should be – especially if you’re thinking about purchasing a piece of equipment* any time soon.
Section 179 offers a great opportunity for small and medium-sized business owners to reduce their taxes. The tax code allows what is called first-year expensing. Under Section 179, the IRS allows taxpayers to deduct the full amount of a business expense in the year the property is placed into service. So, instead of writing off qualifying equipment a little at a time through depreciation, Section 179 allows you to write off the entire purchase price the same year the equipment is bought and thereby reduce your current year tax liability. This can add up to big tax savings.
Tax law changes often. For the 2022 tax year, Section 179 is limited to a maximum deduction of $1,080,000. Once this spending cap is reached, taxpayers may be eligible for a bonus depreciation of 100%. To get the most out of Section 179, the total equipment purchase for 2022 must not exceed $2,700,000.
There are a few important caveats to note. To qualify for a Section 179 deduction, your business must be profitable. In addition, you must elect for the deduction — it’s not automatic. Finally, any qualifying equipment you purchase must be put into service by the end of the calendar year. That doesn’t give you a lot of time, especially given the continued unpredictability of supply chains.
You’ll have to consult your tax accountant about profitability and electing for the deduction, but our team here at Triton Capital can help you save time (and headache) during the purchasing process. We’ve modernized the financing process to make it fast and easy to get a small business loan. With Triton Capital, you can apply for financing from the comfort of your home or office, and within a matter of hours, get approved for a loan with no down payment or additional collateral. You complete one application, and our Client Advocates get you the best terms possible. Compare this to traditional bank loans that can take days, sometimes weeks, to process.
As a business owner, your time is invaluable and every penny counts. Make the most of both with a small business loan from Triton Capital. Our Client Advocates are ready to answer your questions. And don’t forget to elect for your Section 179 deduction.
* Please consult a tax professional for advice on your unique situation before making any purchases toward Section 179. While we are experts in financing, we do not give legal or tax advice.