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The Section 179 Deduction

2020 Deduction Limit = $1,040,000
This deduction is good on new and used equipment, as well as off-the-shelf software. To take the deduction for tax year 2020, the equipment must be financed or purchased and put into service between January 1, 2020 and the end of the day on December 31, 2020

2020 Spending Cap on Equipment Purchases = $2,590,000
This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced on a dollar for dollar basis. This spending cap makes Section 179 a true “small business tax incentive” (because larger businesses that spend more than $3,630,000 on equipment won’t get the deduction.)

Bonus Depreciation: 100% for 2020
Bonus Depreciation is generally taken after the Section 179 Spending Cap is reached. The Bonus Depreciation is available for both new and used equipment.

Limits of Section 179

Section 179 does come with limits - there are caps to the total amount written off ($500,000 for 2019), and limits to the total amount of equipment purchased ($2,000,000 in 2019).

For more information regarding Section 179, please visit: http://www.section179.org/section_179_deduction.htm

The Section 179 Deduction Calculator

Initial Purchase Price:
Section 179 Deduction:
50% Bonus Depreciation Deduction:
Normal 1st Year Depreciation:
Total First Year Deduction:
Cash Savings on your Equipment Purchase:
Final Cost of your Equipment Purchase:


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