Section 179 Tax Deduction For 2022
We gathered up everything you need to know for 2022.
Overview: Section 179 tax deduction for 2022.
If you own a small business, the Section 179 deduction is one of the most essential tax codes you need to be familiar with. It lets you deduct all or part of the cost of equipment purchased or financed and put into place before December 31, 2022.
The only stipulation is that the equipment needs to qualify for the deduction. Balboa Capital has all the information you need to know, along with a helpful Section 179 calculator. It’s a good idea to become familiar with this tax incentive to plan for your business’s future regarding capital equipment purchases.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Section 179 tax deduction limit.
The current deduction limit is $1,000,000 on qualifying equipment, and the limit on equipment purchases has increased to $2.5 million. This was enacted through the Tax Cuts and Jobs Act.
In addition, the bill allows businesses to depreciate 100 percent of the cost of eligible equipment bought or financed from September 27, 2017, through 2022. Lastly, bonus depreciation now applies to used equipment.
How do I get the deduction?
Section 179 is a tax deduction for businesses that have placed new or used equipment into service within the year purchased or financed. This deduction is not automatic and must be elected. To elect to take the deduction, you’ll need to fill out Part 1 of IRS form 4562.
Make sure this completed form is attached to your tax return. Not all types of equipment qualify; therefore, you should consult your accountant or tax professional before making any purchases.
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