Are you a business owner who is interested in learning more about tax credits that you may be eligible for? If so, you may find that the credit known as section 179 may be the right one for you. The section 179 tax credit is one that many business owners can take advantage of because it is fairly easy to use. In order to learn more about the section 179 tax credit, read on:
How the Section 179 Tax Deduction Works
With this deduction, the IRS will allow businesses to actually deduct the cost of certain assets they are purchased for business use. Previous to this credit being enacted, business owners who made qualifying purchases, like office furniture, would have to depreciate the item. Now, if a business owner buys office furniture, they can take this credit immediately and use it to offset taxes in the year the assets were purchased. Each year, you can take up to $125,000 worth of credits but you can only take this if your income was at least $125,000 or above. If it was less, you will only be eligible for credits of that amount.
What Items are Eligible?
In order to take advantage of this tax credit, you will need to buy eligible equipment. Generally there are a number of things that you can buy for your business that will make you eligible for this tax credit. For instance, machinery is one of the things that you will be able to purchase and get a credit on. Office furniture is another. You will be able to use this credit when you buy things like automobiles, airplanes, computers, software and much more. In order to take the credit, however, you will need to make sure that you are using the item for business at least 50% of the time. For instance, if you buy a new company vehicle, that vehicle must be used for business purposes. This doesn’t mean you can’t use it for personal reasons, of course, just half the time it must be for business.
This is just a basic overview of this tax credit. For more information on how you can use this credit for your advantage, it will be important that you find a firm that can help you understand the ins and outs.
