A Comprehensive Guide to Utilizing Section 179 for Equipment Purchases

What is Section 179?

Section 179 is a tax deduction for businesses that allows them to deduct the full purchase price of qualifying equipment and/or software that was financed or purchased during the tax year. This deduction can be used to reduce the overall cost of the equipment purchase, and it is available to both small and large businesses.

How does Section 179 work?

The Section 179 deduction allows businesses to deduct up to $1,050,000 in qualifying equipment and software purchases in the tax year. In addition, businesses can also take advantage of bonus depreciation, which allows them to deduct an additional 100% of the cost of qualifying equipment and software in the year it was purchased.

What equipment qualifies for Section 179?

The following types of equipment qualify for the Section 179 deduction:

  • Machinery and equipment
  • Furniture and fixtures
  • Computers and software
  • Vehicles weighing over 6,000 pounds
  • Property attached to a building (i.e. HVAC systems, security systems, etc.)

It is important to note that the equipment must be used for business purposes at least 50% of the time in order to qualify for the deduction.

How to take advantage of Section 179?

In order to take advantage of the Section 179 deduction, businesses must purchase or finance qualifying equipment or software and put it into use by December 31st of the tax year. Businesses must also file Form 4562 with their tax return to claim the deduction.

Why is Section 179 beneficial for businesses?

Section 179 is beneficial for businesses because it allows them to reduce their overall tax liability by deducting the full purchase price of qualifying equipment and software. This deduction can help businesses free up cash flow and reinvest in their business by upgrading their equipment and technology.


In conclusion, Section 179 is a tax deduction that can provide significant benefits for businesses looking to purchase or finance new equipment or software. By taking advantage of this deduction, businesses can reduce their overall tax liability and reinvest in their business for future growth and success.

We hope this guide has been helpful in understanding Section 179 and its benefits. If you have any questions or would like more information on this topic, please don’t hesitate to contact us.

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