It’s that time of year again; the time when your accountant lets you know how much you’re going to owe in taxes to Uncle Sam. If your accountant is worth the money you pay him, one of the questions he’ll be asking you is whether or not you qualify for any Section 179 tax deductions in 2021.
To help you understand more about what Section 179 is, how to qualify for it, and the restrictions of the tax deduction, we’ve provided answers to a few frequently asked questions. Keep reading to learn more about Section 179 of the Internal Revenue Service tax code and the possible tax benefits of turf equipment purchases.
What is a Section 179 Tax Deduction?
Essentially, Section 179 of the IRS tax code allows a small business to write off the entire cost of certain types of equipment and software as a deduction from its gross income. So if you purchased a new fairway mower in 2020, you may be eligible for a Section 179 tax deduction. However, to be sure, check with the tax accountants at Adelaide.
How Does Section 179 Work?
Usually, when your business buys a piece of equipment, you can only write off a portion of the cost of that equipment each year for a certain number of years. However, in an effort to encourage businesses to buy more equipment and thus stimulate the economy, the government is allowing small- and medium-sized businesses to write off the entire cost of certain types of equipment.
What Are the Restrictions to a Section 179 Deduction?
There are limits to how much you can deduct using Section 179. In 2021, the most you can deduct is $1,050,000.
Who Qualifies for Section 179?
Any business that purchased or leased less than $3,670,000 million in new or used equipment in 2020 should qualify for this deduction. Qualifying equipment includes software, computers, and, of course, vehicles such as turf equipment. Click here for a full list of qualifying equipment.
For more information, download this flyer distributed by the Toro Company about Section 179 deductions, or use this calculator to see how much you can save this year. Of course, you’ll want to consult with a qualified tax professional to find out whether or not you qualify for a Section 179 deduction – but at least now you’ll be slightly more prepared when you bring this subject up with your accountant.
Contact Kenney Machinery
If you’re in need of more information surrounding the tax benefits of turf equipment purchases, we can help. Get in contact with us today to learn more.
Whenever your facility is in need of used or new turf equipment, the professionals at Kenney Machinery can help. Request a free equipment demonstration from us today to see how our turf equipment products can help with any project that comes your way.