Maximize Your Business Tax Savings with Section 179 in 2024

As a business owner, it's important to stay informed about tax deductions that can help you save money and reinvest in your company's growth. One of the most valuable tax incentives available is Section 179, which allows businesses to deduct the full purchase price of qualifying equipment and software bought or leased during the tax year. When you purchase a vehicle for your business at Mark Moats Ford, you can take advantage of tax savings to get the most out of your budget and improve your bottom line.

What is Section 179?

Section 179 is an IRS tax code that encourages small businesses to invest in equipment and software by allowing them to deduct the full purchase price from their gross income. This immediate expensing makes purchasing or leasing business equipment and software more affordable.

Important Changes to Section 179 in 2024

For the 2024 tax year, there are some notable changes to Section 179 that businesses should be aware of:

  • The deduction limit has increased. Businesses can now deduct up to $1,220,000 of qualified equipment purchases, up from $1,160,000 in 2023.
  • The spending cap on equipment purchases has gone up to $3,050,000, a $160,000 increase from the previous year. Exceeding this cap will start to phase out the deduction.
  • The bonus depreciation is now at 60% for qualified property acquired and placed in service after December 31, 2023. This will continue to phase down in subsequent years.

What Purchases Qualify for Section 179?

To be eligible for the Section 179 deduction, the equipment or software must be purchased or leased and put into service during the same tax year. Qualifying purchases include:

  • Vehicles used for business, with restrictions on passenger vehicles
  • Computers, servers, and software
  • Office furniture and equipment
  • Manufacturing equipment and machinery
  • Property attached to your building that's not a structural component (e.g. large manufacturing tools and equipment)

How to Claim the Section 179 Deduction

To claim the Section 179 deduction, you'll need to fill out IRS Form 4562 and attach it to your business tax return. Be sure to keep detailed records of your equipment and software purchases, including the date of purchase, the business use percentage, and the total cost.

It's always a good idea to consult with a tax professional to ensure you're maximizing your deductions and staying compliant with all tax regulations. They can help you navigate the complexities of Section 179 and determine which purchases qualify for the deduction.

Take Advantage of Section 179 in 2024

With the increased deduction limit and spending cap, 2024 is an excellent year to invest in your business's growth by purchasing or leasing new or used vehicles at Mark Moats Ford. Contact our finance team about available incentives and benefits for your business needs.

How can we help?

* Indicates a required field