Business Technology AnalysisSection 179

If you are thinking about replacing some IT equipment, you might want to make your purchase before the end of the year. Your business can use IRS section 179 to get a deduction on your next tax filing.

What office equipment does Section 179 allow you to get a tax break on?

  • Computing equipment including PCs/Macs, tablets, servers, printers, network equipment, security equipment, phones
  • Off-the-shelf software
  • Office furniture
  • Machinery, such as manufacturing tools
  • Vehicles with a gross weight of over 6,000 lbs.

The government put Section 179 in place to stimulate the economy by investing in the future of companies in the U.S. The deduction limit for 2018 is $1 million and the threshold for the total amount of equipment that companies can purchase is now $2.5 million. Also, the bonus depreciation increased to 100 percent for equipment placed into service between September 27, 2017, and December 31, 2022.

Typically, when a business makes a purchase, the transaction cost is allocated across the useful life of the asset. With section 179, your business can deduct the entire equipment cost for the year they buy it. Rayanne Buchianico, an IT accounting consultant, states, “By writing off entire purchases in the first year, it will reduce your net income, which will reduce your income taxes.”

How does Section 179 help your business?

  • You can get significant savings on the equipment you already have to purchase
  • Adding capital equipment lowers operating costs
  • Using up-to-date equipment helps your business stay competitive in your industry
  • You can get a tax write-off when you need it

What are the conditions of Section 179?

  • You must buy the equipment specifically for business purposes.
  • You must use the equipment for at least 50% of business purposes.
  • If you do not use the equipment solely for business purposes, the IRS will reduce your allowance accordingly.
  • You must purchase the equipment from a non-related party. For example, you cannot sell the equipment to yourself or receive it from an inheritance, and then try to claim the deduction.
  • Work vehicles you will not use for personal use usually qualify for the entire Section 179 deduction. Examples include hotel shuttle vans, cargo vans with no seating behind the driver’s seat, and heavy construction equipment.
  • The depreciation deduction limit for standard passenger vehicles is now $11,060 for cars and $11,560 for trucks/vans. This closed a loophole that allowed some businesses to deduct large SUVs, including Hummers.
  • Real property assets do not qualify for the Section 179 deduction. This includes permanent structures, land, paved parking, and fences.
  • You must finance and operate the equipment by December 31, 2018, at midnight.

If you are considering using section 179, make sure to consult your tax advisor to work out the details before proceeding with your equipment purchase. For more information about Section 179, you can visit

You can also contact SwiftTech Solutions at or 877-794-3811 if you need any projects completed, such as network or operating system upgrades, by December 31st.

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