We’ve all heard the old saying, “Only two things are inevitable, death and taxes.” Only the supreme being can help with the former, but there are some things you need to know about the latter. If you are a business owner and haven’t taken advantage of something called Section 179, then you are missing out on saving money. In some cases, a lot of money!
Section 179 has been around for a long time. It allows businesses to write off the full cost of some equipment purchases immediately, rather than depreciating the purchase over several years. Here is what we at Merts Heating and Air Conditioning want to make sure you know: The section 179 tax deduction for small businesses was greatly expanded as part of the Tax Cuts and Jobs Act passed by Congress in 2017. Here are some of the key changes you need to know about the tax advantages especially as it pertains to HVAC replacements:
Now includes HVAC equipment
In the past Section 179 did not include heating and cooling equipment. Those were considered capital expenses and had to be depreciated over 39 years. Now the entire cost can be written off in the year of the purchase meaning the tax break is IMMEDIATE.
Benefits greatly expanded
Congress raised the cap for equipment purchases covered by the Section 179 deduction to $2.5 million.
Annual deduction doubled
The changes included raising the maximum annual deduction to $1 million from the previous limit of $500 thousand.
Section 179 also covers the cost of major upgrades to your current heating and cooling systems. These HVAC improvements on your business property are now a win-win-win-win situation:
- -Using the Section 179 deduction to write off your purchases will reduce your tax bill
- -In turn, reducing the real cost of the equipment by thousands of dollars
- -You will have a much more efficient system(s) resulting in lower monthly bills
- -The new system will add to the value of the property
Add it all up and it’s too good of an investment to pass up! Just remember, tax advantages are NOT like death and taxes. What Congress gives, Congress can also take away so don’t wait too long.
Merts is not trying to be your tax advisor. To better understand the tax advantages, or to get a better idea of exactly how much of a deduction can be claimed on a specific purchase, check with your accountant. Then call Merts Heating and Air Conditioning to take advantage of this huge tax savings. Be sure to like and follow us on Facebook and Twitter for more great information like this.