Don’t Miss Out: 2024 Section 179 Tax Benefits for Small Businesses
As 2024 comes to an end, it’s time for small business owners to be proactive and maximize their tax savings. The Section 179 deduction is a valuable tax incentive designed to encourage businesses to invest in equipment and other qualifying assets. But time is running out to take full advantage of these benefits before they potentially expire or change.
What is Section 179?
Section 179 allows businesses to deduct the full purchase price of qualifying equipment and software purchased or financed during the tax year, rather than only taking a portion of the cost through depreciation expense over time. It’s a great way to reduce your tax bill while investing in your business’s future growth.
For 2024, the deduction limit is expected to remain substantial, with a maximum deduction of $1.16 million and a spending cap of $4.05 million. However, these limits may change in future years, making now an excellent time to act.
4 Things You Can Do Before Year-End to Maximize Section 179 Savings
Identify Needs and Invest in Equipment
Take a close look at your business operations. Could upgrading your tools, machinery, or office equipment improve efficiency or output? Qualifying items include vehicles (under certain conditions), computers, office furniture, and heavy machinery.Consider Software Upgrades
Software that is essential for your operations and not subscription-based often qualifies. If you’re using outdated programs, now might be the time to upgrade to improve productivity while benefiting from the deduction.Finance Your Purchases
Section 179 allows deductions for financed purchases, so you don’t need to pay the full cost upfront. Consider financing equipment and spreading the payments over time while still enjoying the tax benefits for 2024.Consult a Tax Professional
The rules surrounding Section 179 can be nuanced, particularly for vehicles or specialized equipment. A tax professional can help you navigate the process, ensure compliance, and maximize deductions.
Act Now
To qualify for the deduction, the equipment must be purchased and put into service by December 31, 2024. Start planning now to avoid the year-end rush and maximize your tax savings for 2024.
By leveraging Section 179, you can reduce your tax burden while making strategic investments in your business.
If you have questions or need help with year-end bookkeeping, we’re here to help!
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