2018 TAX WRITE-OFF IS $1,000,000.00
Under section 179 of the internal revenue service for 2018, the IRS allows a taxpayer to expense up to $1,000,000.00 of equipment used in trade or business this tax year. Therefore, it is not necessary to depreciate this equipment unless you choose to do so. The full purchase capitalized and depreciated can be used as a direct offset against income up to $1,000,000.00. This is an opportunity to acquire the equipment you have been waiting to acquire, while reducing your taxable income expense at the same time. This could result in a tax savings of up to $330,000.00 for the first $1,000,000.00 spent for capital equipment purchases. Assuming the average federal tax bracket of 33%.
We suggest that you contact your tax adviser for a full understanding of this provision in the tax law, since there are some limitations. Please visit the IRS Tax Code 179 publication site.
Assuming an equipment cost as listed below and based on an average federal tax bracket of 33%, the savings could be as follows:
On $25,000.00 Tax Savings Of $8,250.00
On $50,000.00 Tax Savings Of $16,500.00