Section 179 Tax Deductions

What is Section 179?

Business owners who purchase qualified property can receive a substantial deduction in a single tax year. This is preferred to a little at a time over a number of years. This type of accelerated deduction is simply known by its section in the US Tax Code: Section 179.

Section 179 of the IRS Tax Code allows a small business to deduct, for the current tax year, the full purchase price of financed or leased equipment that qualifies for the deduction. The purchased or leased equipment must be within the specified dollar limits of Section 179, and be placed into service in the same tax year that the deduction is being taken.

Section 179 applies to new and used equipment. Any non-tax lease such as a $1.00 Buyout Lease or an Equipment Finance Agreement will qualify for Section 179 benefits. Not all states follow federal law, so we recommend contacting your tax advisory or visiting for specific details.

What is considered “Qualified Property”

Section 179 was designed with businesses in mind. That is why almost all types of “business equipment” qualify for the Section 179 deduction. Examples of material goods that generally qualify for the Section 179 deduction include:

  • Equipment (machines, etc.) purchased for business use
  • Tangible personal property used in business
  • Business vehicles with a gross vehicle weight in excess of 6,000 lbs
  • Computers / computer software (off the shelf)
  • Office furniture / office equipment
  • Property attached to your building that is not a structural component of the building (i.e. a printing press, large manufacturing tools and equipment)
  • Partial business use (equipment that is purchased for business use and personal use. Generally, your deduction will be based on the percentage of time you use the equipment for business purposes.)

Is your business throwing money away?

If you are not taking advantage of the Section 179, you might be. The first step to find out is to use our Finance Calculator to give you an idea of what we can offer you in terms of financing. Once you know what you can save, use the Finance Application. Once you apply, American Financial Partners* will contact you to let you know the status of your financing options.

*Laser Products Industries has partnered with American Financial Partners to work with our customers so that everyone who needs to purchase one of our lasers will be able to. American Financial Partners has made it a point to inform consumers that the IRS is basically giving away this money, but you have to act fast to get it.

An example…

Let’s say the cost of your new equipment is $20,000. Here is what you will save:

  • First year write-off (Section 179)
    • $20,000
  • Total deductions in 1st year
    • $20,000
  • Marginal tax rate (35% assumed)
    • $7,000
  • Bottom line equipment cost after savings
    • $13,000
  • Total Savings
    • $7,000

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