Equipment purchased in 2023 may qualify for tax deduction
For businesses purchasing equipment, the Section 179 deduction is easy to apply. It gives businesses an incentive to invest in equipment and software to boost efficiency, raise productive capacity, expand products and services, and grow revenue.
Section 179 Tax Deduction
Tax deduction limit is $1,160,000
- Most tangible business equipment qualifies.
- Equipment must be purchased and put into use between Jan. 1 and Dec. 31 of the tax year.
- You can take full advantage of the deduction when financing equipment.
- Submit IRS Form 4562 with your tax filing to claim the deduction.
Consult your tax advisor
Below is an example of how Section 179 and bonus depreciation could affect business tax deductions.
|Cost of equipment||$2,000,000|
|Section 179 deduction||$1,160,000|
|Bonus depreciation deduction||$672,000|
|Total 1st year tax deduction||$1,832,000|
|Potential tax savings||$641,200|
|Equipment cost after potential tax savings||$1,358,800|
* This example presents a potential tax scenario based on assumptions that may not apply to your business. Stearns Bank does not offer tax advice. Please consult your tax advisor to determine the tax implications of acquiring equipment for your business.