Image: 1210 Weld Lathe w/ Laser Vision Seam Tracker
As industries advance, automated welding equipment becomes an even more critical asset. Such machinery can significantly help businesses mitigate issues like high scrap costs, slow production speeds and the welder shortage that plagues the industry.
Here’s where the updated Section 179 for 2023 can make an enormous difference—allowing businesses to realize significant tax savings on modernizing their operations and save thousands in taxes in doing so. Take a deeper dive and discover all that it offers during this fiscal year!
Understanding Section 179
Under IRS tax code section 179, businesses can claim full deduction of qualifying equipment purchased, financed or leased within any given tax year.
Section 179 offers numerous advantages that could save your business tens of thousands.
Deciphering 2023 Enhancements
In 2023, Section 179 has seen significant advancement, enabling businesses to write off up to $1,160,000 on qualifying equipment purchases (an impressive increase from its $1,080,000 limit in 2022!).
Traditionally, businesses would spread out the deduction of an equipment purchase over several years using depreciation. For instance, an investment of $100k welding machinery might generate annual write-offs of $20,000 over five years.
Section 179 has changed for 2023 to allow businesses an outright deduction for equipment costs of $100k (or up to $1,160,000) in one tax year – giving SMEs the potential to make big savings!
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2023 Qualification Criteria
To qualify for the Section 179 deduction in 2023, your automated welding equipment must meet certain criteria. Here is what to keep in mind:
- Equipment should be purchased, financed or leased during the tax year and installed, making it ready to service within its first tax year of being service-ready.
- 50% or more of its use should be for business-related activities.
Savings Snapshot In 2023—Section 179 can offer significant potential savings
2023 Section 179 —Real World Example
- Welding Equipment Cost (after Bancroft discount) = $230,000
- Section 179 Deduction = $230,000
- Total First Year Deduction = $230,000
- 35% Savings Off Purchase Price = $80,500
- Adjusted Equipment Cost After Tax Savings = $149,500
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2023’s Section 179 Provisions Can Open Doors to Welding Automation Investment and Its Benefits
Section 179 allows manufacturers to make smart, cost-effective equipment investments—no better time or place! So, take action before the end of 2023!
Bancroft Engineering of Waukesha, Wisconsin stands at the forefront of welding innovation. Offering standard welding machines to robotic automated systems, our company provides everything needed for successful welding automation processes or special solutions for specialty welders.
If you need help automating your processes or require customized welding solutions for special situations, please reach out to us on 262-786-1880 or sales@bancrofteng.com so that we can start your automation journey together.
