Maximize Your Business Savings with Section 179 Tax Deduction 2024

Section 179 Tax Deduction for 2024

Unlock Big Savings for Your Small Business!

As a small business owner, one of the most valuable tax deductions you can leverage is the Section 179 tax deduction. If you're looking to maximize your business’s tax savings in 2024, this deduction could help you immediately reduce your taxable income by writing off eligible purchases of equipment, machinery, and other business assets. Golden Sun Funding is here to walk you through everything you need to know about Section 179 for the 2024 tax year.

What is the Section 179 Tax Deduction?

The Section 179 deduction allows businesses to write off the full cost (or part) of qualifying equipment and machinery in the year it's put into service, rather than depreciating it over time. This means that if you buy and start using a piece of equipment in 2024, you can deduct the full purchase price from your business’s taxable income for the 2024 tax year.

How Does the Section 179 Deduction Work?

Eligible Purchases: You can write off items such as office furniture, computers, machinery, certain vehicles, and off-the-shelf software.
Non-eligible Purchases: Real estate purchases generally do not qualify, though certain property like roofs, security systems, and HVAC systems might be eligible.
Deduction Timing: The equipment must be purchased and put into service by December 31, 2024, to qualify for the deduction.

2024 Section 179 Deduction Limits

For 2024, the IRS has set the following limits:

Maximum Deduction: $1,220,000
Spending Cap: Once your total qualifying purchases exceed $3,050,000, the deduction limit starts to phase out, reducing your allowable deduction dollar-for-dollar above this threshold.
SUV Deduction: For vehicles like SUVs, the maximum deduction is limited to $30,500.

These limits are for illustrative purposes. Always consult the IRS website or a qualified tax professional for current and personalized information.

Which Expenses Qualify for Section 179?

To qualify for Section 179, the purchased items must be used primarily for business purposes. Here are common items that may be eligible:

Machinery & Equipment: This includes heavy machinery, tools, and production equipment used in your business operations.
Computers & Software: Office computers, laptops, and off-the-shelf software can often be deducted.
Business Vehicles: Vehicles used for business, including cargo vans and heavy SUVs, may qualify—though there are specific rules around which types of vehicles are eligible.
Livestock: In certain industries, livestock can also be deductible under Section 179.

Important Note: Personal purchases do not qualify, so if you're buying equipment for personal use, you won't be able to claim the deduction.

Golden Sun Funding: Does Section 179 Cover Real Estate?

Golden Sun Funding explores how Section 179 covers real estate, noting certain exceptions.

Property used for lodging (e.g., hotels, inns)
Improvements to roofs, fire alarms, security systems, and HVAC systems on business property.

For other types of real estate or land-related expenses, you will likely need to rely on depreciation over time.

What About Vehicles? Does Section 179 Cover Cars and Trucks?

Section 179’s vehicle deduction has earned a nickname as the "Hummer tax deduction" due to its original appeal to business owners buying large SUVs. But not all vehicles qualify.

What qualifies?

Vehicles weighing over 6,000 pounds (e.g., large SUVs, cargo vans).
Special rules apply for vehicles weighing more than 14,000 pounds, or those with specific configurations.
For example, SUVs under 6,000 pounds no longer qualify for the same large deductions they once did, but large vehicles like cargo vans and heavy-duty trucks still benefit from Section 179.

What If You Don’t Qualify for Section 179?

If your purchases don’t qualify for Section 179, you may still be able to use bonus depreciation. This allows businesses to immediately deduct a percentage of the cost of qualifying assets.

Bonus Depreciation for 2024: allows you to deduct 60% of the purchase cost in the first year (down from 80% in 2023). This deduction will continue to decline year by year until 2027, when it will phase out entirely.

Why Section 179 Matters for Your Business in 2024

With the Section 179 tax deduction, you can boost your business’s financial position by offsetting the cost of new equipment and vehicles, helping to preserve your cash flow and invest in growth. Golden Sun Funding is dedicated to ensuring that your business has the tools it needs to take full advantage of this valuable tax incentive.

Get Started with Section 179 Today!

Don't wait until the end of the year to make tax-savvy decisions. Plan your business equipment purchases now to maximize your Section 179 tax benefits.

Need help navigating Section 179? Contact us at Golden Sun Funding today for expert advice, and secure the financing you need to maximize your tax savings.

Disclaimer: Information on this page is for general informational purposes only. Section 179 limits and regulations may change. Consult a tax professional or visit the IRS website for the latest information tailored to your situation.