What is Section 179?
I sat down with Angela Buckendorf, Marketing Manager at Aztec Financial to Discuss What You Need to Know About Section 179
Drew Crawford: What is the most misunderstood thing about Section 179 tax write-offs?
Angela Buckendorf: Many people misunderstand the timeframe for eligibility. You need to purchase the equipment and put it into use by midnight of that tax year. If you do that, it usually qualifies for the tax write-off.
People think that it’s going to be really difficult to be eligible for the write-off or require a lot of paperwork, but it’s not. Your accountant will make it really easy. All you need to do is save your receipts, show your accountant, and they will do the rest.
Drew Crawford: What do you need to tell your accountant to take advantage of Section 179?
Angela Buckendorf: If you have an accountant that you are working with, give them a call now to talk about Section 179. They can look at your business earnings for 2022, review them, see where your taxes are at, and give you a dollar amount that if you spend on equipment will take that much money off of your taxes.
Your accountants will most likely just need the invoices from the equipment that you purchased in order to be eligible.
Drew Crawford: How Many Deductions are Available through Section 179?
Angela Buckendorf: For 2022 all small to medium-sized business owners are eligible for a 100 percent deduction on taxes up to $1,080,000. There’s also a bonus that you are eligible for on depreciating assets that goes up to $2,700,000.
ave cash by financing the equipment or vehicle and reduce your tax liability
Drew Crawford: Why does Section 179 sound too good to be true for many contractors? Can you explain why the government is giving people free money?
Angela Buckendorf: A tax write-off is the government's way of saying that because you put money back into your business you don’t owe taxes on a certain percentage of what you spent. This grows the economy which is why the government incentivizes it.
In other words, it's not free money, this is money that you’re already paying that you are getting back because you are investing it to grow your business.
Drew Crawford: Is a Tax Adviser Expensive if you haven't already hired one?
Angela Buckendorf: If you don’t have a tax adviser to take advantage of Section 179, I would highly recommend getting one. Even if you have to hire a firm like H&R Block or another company, it’s well worth the small amount of money (a few hundred dollars) that you pay for them. Tax professionals specialize in helping you get all of the deductions that you are available for.
It Takes Less Time to Save Money with Section 179 than it Does to Mow Your Backyard
Depending on how big your yard is, you can save thousands of dollars that you already have to pay towards your taxes already in less amount of time than it would take to mow your lawn. All you have to do is call your tax adviser and give them some paperwork. You already have to file taxes every year anyways, so taking advantage of Section 179 is a no-brainer. The money that you receive from Section 179 is yours to invest in your business.
Call your tax professional and claim your tax refund today!
Note: I am not a tax adviser. Please consult with your accountant or tax adviser to take advantage of everything described in this article.
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