tax incentive

§179 And Bonus Depreciation in 2017

Pursuant to § 179 of the Tax code, businesses may deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. The “Protecting Americans from Tax Hikes Act of 2015” (PATH Act) expanded the Section 179 deduction limit to $500,000 and it will remain at this amount for 2017. Here’s § 179 at a glance for 2017.

The § 179 Deduction Explained

The Internal Revenue Code through Section 179 permits businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. Thus, if qualifying equipment is purchased or leased, the full purchase price may be deducted from gross income.

The § 179 deduction is a tax-savings incentive to encourage businesses to increase assets by purchasing equipment and self-invest. This deduction is affected by the “Protecting Americans from Tax Hikes Act of 2015” (PATH Act) that was signed into law in 2015. This bill expanded the Section 179 deduction limit to $500,000, where it will remain for all of 2017.

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