December 20, 2021
We’re rocketing toward the new year, but before the ball drops on 2021, there is still time to make buying and selling decisions that will have positive impact on your company this calendar year.
Government Incentives For Business-Related Purchases: If you own a small- or mid-sized US-based business, you may already know about the Section 179 tax deduction, which allows a business to deduct the full purchase price of qualifying business-related equipment from its taxable income within the year it is purchased.
What you may not know is that the deduction limit increased this year to $1.05 million on purchases up to $2.62 million. Qualifying equipment must be used for business purposes and can be purchased new or used.
What makes the deduction so attractive is that it significantly lowers the true cost of equipment a business needed anyway. It’s essentially an investment in you, by you.
“In years past, when your business bought qualifying equipment, it typically wrote it off a little at a time through depreciation. In other words, if your company spends $50,000 on a machine, it gets to write off (say) $10,000 a year for five years (these numbers are only meant to give you an example).
“Now, while it’s true that this is better than no write-off at all, most business owners would really prefer to write off the entire equipment purchase price for the year they buy it.
“And that’s exactly what Section 179 does – it allows your business to write off the entire purchase price of qualifying equipment for the current tax year.
“This has made a big difference for many companies (and the economy in general.) Businesses have used Section 179 to purchase needed equipment right now, instead of waiting. For most small businesses, the entire cost of qualifying equipment can be written-off on the 2021 tax return (up to $1,050,000).”
The site has a Section 179 calculator, which will enable you to estimate your savings.**
It’s important to note that qualifying purchases must be completed, financed and put into service by the end of 2021.
Generating Income Through Sales Of Used Equipment: The well-reported supply line issues have caused strong buyer demand across many sectors, which is driving up prices on used equipment. Add in buyers wanting to take advantage of the aforementioned tax breaks and the result is a heavy seller’s market.
And we’ve seen that seller’s market firsthand! Here at Capital Online Auctions, we are experiencing high bidder registration numbers, high web traffic, and robust selling prices across all auction categories. We are happy to help you get your used equipment posted before 2022 is here! Contact us here.
**NOTE: Capital Online Auctions is not a tax advisor, please consult your tax professional to find out how your business may benefit from the Section 179 deduction.