CSC-Blog-Using Section 179_062019

Using Section 179 for Tax Deductions

At first blush, you may wonder why a company focused on alternative lending has chosen to highlight a specific tax deduction this month — but it will become very clear as you continue to read. Information like this demonstrates the fact that Clear Skies Capital (CSC) does more than just support businesses with funding, but is invested in doing anything we can to help clients thrive. Thus, we’re happy to help you discover how using Section 179 of the IRS tax code may benefit your business.

What is Section 179?

A Section 179 tax deduction allows business owners to immediately deduct the cost of new equipment that is financed, leased or purchased. Section 179 became a permanent part of the tax law in 1958 — to stimulate investment and the economy.

Recent Changes to Section 179

The 2018 tax law changes included an expansion of Section 179 depreciation; the amount you’re immediately allowed to deduct doubled, from $500,000 to $1,000,000. The $1,000,000 deduction is reduced, dollar for dollar, by each dollar the cost of the equipment exceeds $2,500,000 — a limit intended to ensure small and medium-sized businesses see the most benefit. Those two limits — $1,000,000 and $2,500,000 — will increase annually starting this year by the inflation rate. And in case you’re wondering, the Section 179 deduction is considered a permanent portion of the IRS tax code.

 A Bonus Benefit

The new tax law also enhances bonus depreciation — temporarily. The previous law allowed a 50% deduction of qualifying new assets placed into service. The new law doubles that — allowing a 100% deduction for all qualifying new and used assets placed into service between September 18, 2017 and December 31, 2022. However, a phase-out of the bonus depreciation is scheduled to take place from 2023 through 2026, as it’s considered a temporary provision of the tax code. Your tax preparer can help you determine if your assets meet the criteria as qualifying property — and you’re able to reap significant tax savings as a result.

Why CSC and Alternative Lending

You may read this and think, “great — if only I had the ability to finance, lease or purchase new or used equipment.” You’re not alone. Many small and medium-size businesses find securing equipment financing from traditional lenders to be tough sledding, and in the unlikely event approval is secured, it’s typically not in a timely fashion and includes terms that are decidedly lender-friendly.

Enter CSC, an alternative lender focused on helping businesses overcome the challenges presented by traditional lenders. Our streamlined funding process includes very little paperwork, and you can be approved within 24 hours, even if with less than perfect credit. You’ll get 24-hour access to funding, flexible terms up to 48 months, and a fixed payment and interest rate — plus the interest on your loan is tax deductible.

We offer a variety of business-building loans, including equipment financing, so you can update your business with latest technology innovations — and perhaps enhance your tax situation by taking advantage of the Section 179 deduction as well.

The Takeaway

This might sound too good to be true — access to equipment financing and a possible tax benefit — but it’s not; we’ve been in this business for many years, helping hundreds of business owners just like you. We know how stressful it can be to deal with the everyday challenges of running a business as well as maintaining your ability to be competitive in the future —especially if you think you don’t have access to the capital you need to expand or upgrade your equipment. We’d love to share our expertise while investigating financing alternatives with you. Discover how much you qualify for today— and then chat with your tax professional to see if you can benefit from a Section 179 deduction.