Section 179 Benefits
Section 179 of the IRS tax code allows a business to deduct the full purchase price of purchased or leased equipment for the current tax year from the business’ net taxable business income. In 2016, you can deduct up to $500,000 worth of equipment (that’s a ton of barbells, plates & rowers!). This incentive was created by the United States Government to encourage businesses to invest in new equipment and in their own business’ growth.
Instead of writing off the equipment through depreciation over the course of a few years (typically 3-5), business owners have the opportunity to write off the entire equipment purchase price up front, at one time. This is especially beneficial for those businesses who are leasing the equipment as they did not even have to incur the initial out of pocket expense to qualify for a sizable deduction. Some businesses may be surprised to find that the total amount of lease payments made the first year will actually be less than the tax benefit created through the Section 179 deduction.
*You should always consult with your qualified accountant when it comes to your specific business tax deductions. Additional information on business taxes and Section 179 can be found at www.irs.gov.