Tax Benefits on Equipment
Section 179 Allowance:
Any new or used equipment purchased in 2020 can be deducted in full (up to a total of $1,040,000) in year 1 if the total amount of applicable assets purchased does not exceed $2,590,000. Once the $2,590,000 (cost) threshold is surpassed, the Section 179 allowable deduction ($1,040,000) will begin to be phased out and will be phased out at $3,630,000 (cost) of current year additions. The increased allowance applies to units contracted for and put into service through December 31, 2020. The balance of equipment investment above $2,590,000 is eligible for Standard MACRS depreciation.
The applicable bonus depreciation percentage will now be 100% for property placed in service during 2020. Bonus depreciation applies to new and used equipment.
|Example of a lift truck purchase of $25,000|
|1st year Section 179 allowance||$1,040,000|
|Total 1st-year deduction||$25,000|
| Potential 1st-year tax savings
(21% tax bracket)
|After-tax cost of equipment||$19,750|
Contact us to learn more about the 179 Tax Benefit and how it relates to material handling solutions.
*Please consult your tax advisor regarding the application of the tax laws to your specific situation.