Section 179: What is it? Does a new truck qualify for the deduction?
Businesses have multiple tax breaks that they can take advantage of, but get lost in the financial jargon and forgo the entire opportunity. The Section 179 tax break is one of those opportunities that a lot of small businesses are looking past. This article is going to break down the basics of Section 179, and how you can apply this tax break with the purchase of a new truck.
What is Section 179?
When a company purchases property used for business purposes, they can receive tax deductions for not only the purchase of that item but also the use of the property in a given year. Section 179 was created to help small businesses save money by allowing them to take depreciation deductions for a particular year. Here are the two major requirements for this tax break:
1. The asset must be tangible and in use for an active business.
2. The asset must be purchased and used in the same year you plan to take the deduction.
Does a new company truck qualify?
The quick answer is yes, a new company truck does qualify. In order for the new truck to qualify, it has to be in use the same year a company is filing for the tax break. Every company that purchases a truck from Tom’s and Carmenita Truck Center is putting their new truck to use immediately, so that is never an issue. For all small businesses, the deduction cap for assets is $500,000. For tax purposes, the sales force at Tom’s/Carmenita will advise you to keep documentation that shows that your truck was used during the particular year you choose to take the tax break.
So when a company is looking to purchase a new work truck, don’t forget to take advantage of the tax breaks! It can save a company money at the end of fiscal year that can be put to better use. Tom’s and Carmenita Truck Center has qualified sales people that can advise you in purchasing commercial trucks and also ways to save money in the long run.
Tom’s Truck Center
Written by Chris Kaiser