It’s that time of the year again, when plans and investments are being finalized for 2019 and year-end budgets are under heavy scrutiny.

One item that’s most likely on your checklist (if it isn’t, it should be) is advanced depreciation with Section 179.  It grants you the ability to deduct the full purchase price of qualifying equipment and software purchased or financed this year. The result of accelerating the depreciation is that your net income for this year is lowered and you pay less in taxes. We all know that once you pay the tax bill, that money is most likely gone.

Do Your Homework to Make an Impact

“This has made a big difference for many companies, and for the economy in general. Businesses have used Section 179 to purchase needed equipment right now, instead of waiting. For most small businesses, the entire cost of qualifying equipment can be written-off on the 2018 tax return (up to $1,000,000).” – Section179.org

While Section 179 has an impact on your federal taxes, note that many states don’t conform with the new rules. Be sure to research or check with your tax professional on state regulations if you are expecting this to apply to state taxes.

The Section 179 website is clearly written, and covers the vital details like bonus depreciation, which doesn’t apply ever year but will be relevant in 2018.

What is Section 179 All About?

Why is Section 179 even available? Isn’t the government losing out on tax revenue?
If you’re investing in your business by buying products from other businesses, that money counts as revenue for the company you are buying from and they have to pay taxes on that revenue.  It’s kind of like handing off the tax burden to the seller.

In the end, the benefit to your business today is that you get new equipment or software at a discount rolled into your due taxes instead of being directly included on the purchase agreement.

Why Alliance?

Investing in your business more than makes sense to set the standard for future growth. If you are planning to invest in software for your construction business, please contact Alliance Solutions Group. We represent multiple industry leading construction software solutions and are ready to help facilitate your growth.