Take Advantage of Tax Savings in 2023 on Equipment & Software

What is Section 179?

Each year the IRS allows businesses to make certain purchases for their business that may have a positive effect on the "bottom line or retaining earnings."

Essentially, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment 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. 

These purchases can include new hardware equipment, electronic document management software, installation of services, and more!

By taking advantage of Section 179 tax savings, you can:

1. Upgrade Your IT Infrastructure: Stay competitive and efficient by investing in the latest technology, such as servers, workstations, and network infrastructure.
2. Enhance Cybersecurity: Bolster your company's security measures with advanced security software and protocols to protect your business from evolving cyber threats.
3. Boost Productivity: Invest in software and tools that streamline operations, automate tasks, and increase productivity across your organization.
4. Scale Your Business: Expand your capabilities and take on new projects by investing in the equipment and software you need to support your growth.
5. Increase Competitiveness: Keep up with industry trends and stay ahead of the competition with modern tools and technology.

2023 Deduction Limit = $1,160,000

This deduction is good on new and used equipment, as well as off-the-shelf software. To take the deduction for tax year 2023, the equipment must be financed or purchased and put into service between January 1, 2023 and the end of the day on December 31, 2023.


2023 Spending Cap on equipment purchases = $4,050,000

This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced on a dollar for dollar basis. This spending cap makes Section 179 a true “small business tax incentive” (because larger businesses that spend more than $3,780,000 on equipment won’t get the deduction.)


Bonus Depreciation: 80% for 2023

Bonus Depreciation is generally taken after the Section 179 Spending Cap is reached. The Bonus Depreciation is available for both new and used equipment.
 
The above is an overall, “birds-eye” view of the Section 179 Deduction for 2023. For more details on limits and qualifying equipment, as well as Section 179 Qualified Financing, please visit www.section179.org.

Contact us to learn more about how your business can take advantage of these tax savings!

*Please consult with your financial advisor before making any purchasing decisions.