By Jack Craven, CPA, CGMA, MBA
SYNOPSIS
Section 179 of the IRS tax code lets you deduct the full price of qualifying equipment or software purchased or financed during the tax year—so act now.
The end of the year is quickly approaching, and it’s time to take the proper steps to minimize taxes on your personal and business returns. Your tax planning strategies for 2014 should include accelerating deductions and deferring income—so act within the next several weeks to capture tax savings for the year.
Section 179 of the IRS tax code makes it possible for businesses to deduct the full price of qualifying equipment or software purchased or financed during the tax year. If you buy or even lease qualifying equipment, you are allowed to deduct the full price from your gross income up to a maximum deduction of $25,000 in 2014.
You can elect this option in place of recovering the cost by taking depreciation deductions.
All businesses that purchase, finance or lease less than $200,000 in new or used business equipment during tax year 2014 qualify for the Section 179 Deduction. If you spend more than $200,000, the Section 179 deduction begins to be reduced.
Example: Section 179 Deduction for Equipment Purchase
What is Covered
Section 179 applies to virtually every type of optometric equipment you can buy. This also includes passenger vehicles used 50 percent or more for business, however, there are limitations. It also includes off-the-shelf software, qualified leasehold improvements and retail improvements.
Time Frame: Act Now
Important to note: In order to qualify for deductions, you must purchase and place the property in service by December 31, 2014.
Jack Craven, CPA, CGMA, MBA, is president and founder of John F. Craven CPA, LLC, with offices in New York City and Garden City, NY. To contact him for answers to tax-related questions: (212) 605-0276 or Jack@JFCravenCPA.com
