We hope you're familiar with the Section 179 page on our website. We update it each year with relevant changes. This year is unusual because, as we're all painfully aware of, significant issues with the technology supply chain means your benefits for 2021 might also be affected.
Here's what know this year:
What is the Section 179 Tax Benefit?
There’s a little-known tax relief called Section 179, which allows you to write off the entire spend on new IT equipment and other capital expenditures in this tax year (rather than depreciate over a few years). To qualify you must make the purchase and put it into service by the end of the day on December 31, 2021.
2021 Deduction Limit = $1,050,0002020
This deduction is good on new and used equipment, as well as off-the-shelf software. To take the deduction for tax year 2021, the equipment must be financed or purchased and put into service between January 1, 2021 and the end of the day on December 31, 2021..
2021 Spending Cap on equipment purchases = $2,620,000
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 2021
Bonus Depreciation is generally taken after the Section 179 Spending Cap is reached. The Bonus Depreciation is available for both new and used equipment.
See our Section 179 page to use the Calculator for 2021.
We want you to always feel comfortable reaching out to your Fulcrum Group Fractional CIO for how Section 179 might be able to help you!