IRS Section 179
What is it?
Small businesses can get up to the maximum 2016 tax deduction when they purchase a new Ford vehicle by December 31, 2016. Thanks to the new guidelines under IRS Section 179 of the IRS tax code, many small businesses that invest in new equipment can now write-off up to $500,000 worth of these purchases on their 2016 IRS tax returns.
Normally, small businesses spread these deductions over several years. But now, the tax benefits provided under IRS Section 179 allow many small businesses to write off up to $500,000 of qualifying new equipment in the first year it is placed in service.
Benefit examples for qualifying businesses:
- The qualifying vehicle must be purchased and placed into service between January 1, 2016 and December 31, 2016
- It must be used at least 50% for business, based on mileage, in the first year it is placed in service
- If you choose to use it for both personal and business use, the cost eligible for deduction would be the percentage used for business
- Note that all businesses that purchase and/or finance less than $2,000,000 in business equipment during tax year 2016 should qualify for the Section 179 Deduction
- For the 2016 tax year, the qualifying vehicle must be purchased and placed into service between January 1, 2016, and December 31, 2016.
HURRY! MUST ACT BY DECEMBER 31, 2016 TO GET DEDUCTION FOR THE 2016 TAX YEAR.
What is IRS Section 179 & how can it help my bottom line?
- Section 179 is the current IRS tax code that allows you to buy qualifying Ford vehicles and deduct up to the full purchase price (including any amount financed) from your gross taxable income if purchased before December 31, 2016
- That means that if you buy a piece of qualifying equipment and products, you may be able to write off up to the FULL PURCHASE PRICE from your gross taxable
Does the date of my purchase have an impact on the section179 deduction?
- Yes. To qualify for the Section 179 tax deduction for the 2016 tax year, your Ford vehicle must be purchased or leased and placed into service by December 31, 2016
Which vehicles qualify for the greatest IRS tax savings?
- Trucks with a GVWR greater than 6,000 lbs. and a bed length of at least six feet (i.e., Ford F-150/F-250/F-350) qualify for the maximum first-year depreciation deduction of up to the FULL PURCHASE PRICE
- SUVs, including trucks, with a bed length of less than six feet and a GVWR greater than 6,000 lbs. (i.e., Ford F-150 SuperCrew 5½ ft. bed, Explorer, Expedition) qualify for a maximum first year depreciation deduction of up to the first $25,000 of the full purchase price plus 60% depreciation of any remaining balance
What about smaller Trucks/Vans/SUVs?
- Vehicles of less than 6,000 lbs. GVWR (built on a truck chassis), such as the Transit Connect, may still qualify under current bonus depreciation for up to $11,560 per vehicle in the first year
- Passenger automobiles under 6,000 lbs. GVWR also may qualify for up to $11,160 in depreciation
For more information please refer to IRS.gov (Section 179 Deduction) -or- consult a tax advisor.