Doing your business’s taxes is an extremely involved process that leaves room for plenty of mistakes to be made. This is why many businesses hire an accountant and sometimes even a tax lawyer to help them through the process. One of the newest ways for businesses to reduce their tax liability is with the Section 179 deduction. Limitations apply to this tax code, though, so it is even more important to see a professional about taking the deduction.
What Can Be Deducted?
One of the most important things you need to know is which aspects of your business can be deducted as part of this tax code. There are many ways in which you can take advantage of this aspect of tax code, allowing you to make improvements to your business that can reduce your tax liability. However, not everything will qualify, such as old equipment or software you may purchase for your business. This makes talking to an expert essential so you don’t miss anything.
Monetary Limitations
Like many other aspects of tax code, there are limits to the amount of money you can claim in your deduction. These Section 179 deduction limitations are important to understand. For the 2013 tax year and retroactive back to the 2012 tax year, these limitations were raised to $500,000 per year, allowing businesses to complete even more renovations and receive a greater deduction for those changes that will also save them money over a longer period of time.
Financing
In many case, the purchase you make for your business cannot be deducted if you finance that purchase. This is because your business is not yet out the money it costs. However, when it comes to the Section 179 tax deduction, you may be able to take the deduction, even if you have financed the purchase or renovations. It is important to talk to someone who is well-versed in this area of tax code so you can find out if you still qualify.
The IRS has placed Section 179 deduction limitations to make sure no business wrongly takes advantage of a tax code meant to help businesses afford the improvements they need. If you are planning on taking this deduction, it is important to talk to someone who is informed of the process so you can learn what exactly can be deducted and what monetary limitations are in place. You must also find out if financed purchases will also qualify, allowing you to save even more money.
To speak to a professional about the Section 179 deduction limitations in place, visit the Walker Reid Strategies.
