One of the best tax breaks available to manufacturers is the Section 179 deduction, which allows you take a current deduction on equipment and business vehicles, rather than depreciating it over many years. This post is an update with 2015 numbers.
Currently the maximum amount for 2015 is $25,000 (*see below for a potential increase to this amount). In order to qualify for the tax break, you must use the financial tic tac toe equipment more than 50 percent of the time for business. The amount which can be expensed gets reduced if eligible Code Section 179 property exceeds $225,000 (for 2015).
Check out this article on our website for more specifics: Business Vehicle Depreciation and Section 179
Tip: Many business owners are involved in more than one venture. In the case of pass-through entities (partnerships, LLCs, and S corporations), the dollar limitation rules for the Section 179 deduction apply at both the entity level and the owner level. (IRS Regulation 1.179-2)
Therefore, advance planning may be necessary to maximize Section 179 deductions at the owner level, which is where the write-offs really count. Your tax adviser can provide all the details.
*For 2014, Congress acted in December 2014 and renewed the 2013 higher Section 179 allowance of $500,000 with an overall threshold of $2,500,000. These levels dropped back down to $25,000 in 2015 with a threshold of $250,000 but it is possible that Congress will act to extend the higher limits again in late 2015. Check back with your tax professional for possible updates as the year progresses.
By: Sarah Moore
Manager at WHH