How To Recoup IT Spend Via The Section 179 Tax Code


11.3NewsletterSection 179 of the IRS tax code is one of the most important for business owners. It allows your business to deduct technology and other equipment in the year it is purchased to recoup some or all of the cost, which helps business owners write off a big portion of purchases. It's an incentive created by the U.S. government to encourage businesses to buy equipment and keep up with the rate of change in technology.
For the 2014 tax year, Section 179 dropped from the rate of $500,000 it maintained from 2010-13 to a smaller amount of $25,000 in 2014-15. However on April 3, 2014 the Expiring Provisions Improvement Reform and Efficiency Act of 2014 continued to allow the $500,000 limit.
Below is an example of how the tax deduction works. For the most up to date information visit
  • Most small business owners are eligible to write off up to $500,000 (possibly $25,000 in 2014-15) worth of equipment.
  • Any qualified purchases that exceed $500,000 are eligible for a bonus depreciation which accommodates a deduction up to 50 percent of the cost.
  • However if your company makes more than $2 million in purchases you will lose the full benefit of the deduction at a rate of one less dollar allowed for every dollar spent past $2 million.
  • Most technology investments including new and used equipment are eligible for the deduction as long as it is used for business purposes 50 percent of the time.
  • Eligible equipment includes a wide range items from computers and software to machinery and office equipment.
Section 179 presents a tremendous opportunity for small businesses to make beneficial technology investments. For up to date technology recommendations and to ensure you are taking advantage of Section 179 benefits contact Managed Solution at 800-550-3795 or fill out the contact form.


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