2018 Tax Deduction for Business
Section 179 of the IRS tax code allows businesses to deduct up to the full purchase price of qualifying equipment purchased or financed during the 2018 tax year
2018 Deduction Limit =
$1,000,000 (one million dollars)
This deduction is good on new and used equipment, as well as off-the-shelf software. To take the deduction for tax year 2018, the equipment must be financed/purchased and put into service between January 1, 2018 and the and of the day on December 31, 2018.
2018 Spending Cap on equipment purchases = $2,500,000
This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced on a dollar for dollar basis. This spending cap makes Section 179 a true “small business tax incentive” (because larger businesses that spend more than $3.5 million on equipment won’t get the deduction.)
Bonus Depreciation: 100% for 2018
Bonus Depreciation is generally taken after the Section 179 Spending Cap is reached. Further, the bonus depreciation is 100% and is made retroactive to 9/27/2017 and good
What Vehicles Qualify for the full Section 179 Deduction?
Many vehicles that by their nature are not likely to be used for personal purposes qualify for full Section 179 deduction including the following vehicles:
1. Heavy “non-SUV” vehicles with a cargo area at least six feet in interior length (this area must not be easily accessible from the passenger area.) To give an example, many pickups with full-sized cargo beds will qualify (although some "extended cab" pickups may have beds that are too small to qualify).
2. Vehicles that can seat nine-plus passengers behind the driver's seat (i.e.: Hotel / Airport shuttle vans, etc.).
3. Vehicles with: (1) a fully-enclosed driver's compartment / cargo area, (2) no seating at all behind the driver's seat, and (3) no body section protruding more than 30 inches ahead of the leading edge of the windshield. In other words, a classic cargo van.
Please Note: This information is provided by your local Ford Dealership as a public service to you. It should not be construed in any way as tax advice or a promise of potential tax savings or reduced tax liability. Individual tax situations may vary. Federal rules and tax guidelines are subject to change. For more information, about the Section 179 tax code and tax deductions, please contact your tax professional for complete rules applicable to your transactions and visit the Internal Revenue Service website at www.irs.gov.