November 30, 2020

Can Your Construction Business Benefit from 2020 Section 179 Deductions?

section 179 2020

Did you know about the Section 179 deduction?

The IRS Section 179 deduction is an annual tax deduction aimed at incentivizing small and mid-sized businesses to make equipment purchases. Section 179 may allow you to deduct some qualified equipment purchases from your business’s gross income. The 2020 Section 179 deduction offers more savings potential than ever so you can equip your business for success.

There are conditions to the deduction, including: 

  • Your business must start using the qualifying equipment before the end of the tax year in which it was purchased.
  • There’s a spending cap, and after exceeding the cap, your potential tax deduction decreases dollar for dollar.

The Section 179 deduction can help your business grow faster by making large purchases of qualifying equipment more affordable.* Qualifying equipment is a broad term that can apply to lots of items, including vehicles, construction equipment, software and tools. Talk to your CPA to find out what’s considered qualifying equipment for your business. 

If you’re a contractor, adding new or used equipment to your fleet is often a common write-off under Section 179. More fleet means more capital to help your business get more work done: you can hire more employees, take on more projects and complete work faster.

Don’t miss out on substantial tax savings and the opportunity to invest in improving your business. Get in touch with your CPA and ask about the 2020 Section 179 deduction.

What’s new for Section 179 in 2020?

In 2020, Section 179 deduction and spending caps increased slightly from last year:

  • Total deduction cap increased from $1 million to $1.04 million
  • Total cap on qualified equipment purchases from $2.5 million to $2.59 million

This means that your business may be able to deduct up to $1.04 million of equipment purchases.*

Take 100% bonus depreciation for more tax savings

Bonus depreciation is another opportunity to experience tax savings on qualified equipment. Bonus depreciation went from 50% to 100% until the end of 2022 with the passing of the Tax Cuts and Jobs Act (TCJA). This deduction may allow you to fully depreciate the cost of qualified equipment purchased during the tax year, rather than depreciating equipment over several years.* As always, talk to your CPA to find out what’s best for your business.

Try out this deduction calculator to estimate what you might save if your business qualifies for Section 179 and/or bonus depreciation.

Grow your fleet and save on taxes

Deductions like Section 179 can enable you to immediately invest in business enhancements, like updated software or additional heavy equipment. Instead of waiting several years to make a large purchase, Section 179 can make it viable much sooner.

Don’t leave tax savings on the table in 2020. The Section 179 deduction and bonus depreciation may be more beneficial to you than ever. These deductions can make a significant difference when it comes to expanding your business and strengthening your construction fleet. Ask your CPA or financial advisor if adding equipment now is right for you.

Adding equipment to your fleet doesn’t have to be stressful—and neither does maintaining it. EquipmentShare is an authorized dealer for several leading OEMs. Our sales reps will work with you to find the right machines for your fleet. Get equipment from top brands, including Doosan, Link-Belt, Sany, Takeuchi, Wacker Neuson and Yanmar, at an EquipmentShare dealership location near you.

Buying with EquipmentShare gives you access to lifelong machine service powered by our proprietary smart jobsite technology. Bring your assets in for service at any EquipmentShare branch nationwide, or give us a call, and we’ll send a service technician to you.

The team at EquipmentShare is here to make buying new equipment as easy as possible and back it up with excellent, lifelong service. Get in touch with a rep today.

*Not all buyers are eligible for tax deductions. EquipmentShare does not provide tax, legal, or financial advice. Contact your CPA or financial advisor for advice.

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