How the Section 179 Deduction Can Benefit Your Business

Callum CreedNews

Every small business wants to find ways to minimize expenses and increase efficiency in the workplace. Section 179 is a tax provision that can help you reduce your operating costs by giving you deductions on certain types of equipment. If your business has a tight budget but needs printers or other devices, leveraging a Section 179 deduction can be a game-changer. Here’s everything you need to know about claiming this tax break.  

What Is Section 179?

Section 179 is a tax incentive for businesses that have purchased or financed equipment in that tax year. It applies to tangible personal property used for business purposes, which means that office equipment like your new multi-function printer can be tax-deductible. 

Businesses can deduct the full purchase price of qualifying equipment from their gross income. However, there is an annual cap on the total amount of equipment purchases eligible for a Section 179 deduction. The expensing limit for 2024 is $1,220,000.

How Section 179 Can Benefit Your Business

1: Immediate Deductions

Traditional depreciation spreads the cost of an asset over several years. Section 179, however, allows you to deduct the full purchase price of qualifying equipment in the year it is placed into service. This not only reduces your taxable income, but also frees up funds that can be invested into other areas of your business.

2: Improved Productivity

This deduction applies to a wide range of office equipment, including printers, copiers, and document management system (DMS) software. You can improve productivity by replacing inefficient or outdated office equipment with faster, more advanced devices. Plus, new printers and copiers have better security and more intuitive features that help streamline basic tasks.   

3: Reduced Office Costs

The tax savings from Section 179 can significantly reduce the overall cost of ownership. But investing in new office equipment can save your business even more money in the long run. For instance, keeping your technology up to date reduces downtime and improves time management. Plus, document management systems help you save money by reducing paper and toner costs. 

How to Claim the Section 179 Tax Deduction

Purchase Qualifying Property 

The Section 179 tax deduction applies to tangible personal property, equipment purchased for business use, improvements to non-residential buildings (roof repairs, HVAC systems, etc.), certain business vehicles, and software. It can include printers, copiers, and digital document management systems.

Verify the Purchase Date

Make sure to keep accurate records of the purchase date. In order to qualify, the property must have been purchased and put into service during the tax year in which you are claiming the deduction. 

Complete IRS Form 4562

You must complete IRS Form 4562, Depreciation and Amortization, in order to claim the deduction. This form helps calculate the depreciation deduction. 

Include Form 4562 in Your Tax Return

Attach the completed Form 4562 to your business tax return. Clearly document the Section 179 deduction on the appropriate line. 

Start Upgrading Your Office Equipment Today

Section 179 makes replacing old office equipment much more affordable. If your printer or copier is malfunctioning, or if you’d like to go paperless with a document management system, contact WiZiX Technology Group. We offer premium multifunction printers, copiers, DMS software, and other office technology from premium brands. Call us today at 866-846-1411 to request a quote.