Whether you’re buying a new machine for the first time or are ready to upgrade existing equipment, the Section 179 tax deduction is something you’ll want to look into. When you purchase automated welding equipment from Bancroft Engineering, you will not only be improving your manufacturing process but also saving your business money on your 2020 taxes with Section 179 expensing.
How Does Section 179 Expensing Work for Welding Equipment Purchases?
The Section 179 Tax deduction is for all businesses that purchase (or finance) new and used business equipment during the 2020 tax year.
Section 179 of the United States Internal Revenue Code (26 U.S.C. § 179) is now available which allows you to write-off up to $1,040,000 of a qualifying equipment purchase for 2020. This annual deduction amount is up from $1,000,000 in 2019.
In past years, when manufacturers purchased welding equipment, they would write it off little by little through depreciation. For example, if your business spent $80,000 on a piece of machinery, you might write off $20,000 per year for five years.
When you use Section 179 in 2020, a business can write-off the entire purchase price of qualified equipment for the current tax year. As in our previous example, if your business spends $80,000 on a piece of automated welding machinery, you can write off all $80,000 in the same tax year using Section 179. This is an attractive tax deduction for small and mid-sized businesses to take advantage of!
How to Qualify for Section 179 in 2020
If you’re considering whether or not to purchase new equipment this year, section 179 is an attractive tax deduction to take into consideration. It’s also easy to understand and apply. Most new and used tangible business equipment qualifies as long as it meets the following criteria:
- Equipment must be installed and ready for service in the same tax year
- More than 50% of the use of the equipment must be used for business
Real Example of Section 179 Expensing in 2020
- Cost of equipment after Bancroft Engineering discounts: $200,000.00
- Section 179 Deduction: $200,000.00
- Total First Year Deduction: $200,000.00
- 35% Saving on Equipment Purchase: $70,000.00
- Lowered Cost of Equipment After Tax Savings: $130,000.00
NEW Automated Welding Machines + Tax Savings
Buying equipment or upgrading your existing welding machines can provide many benefits from improved quality, increased production to better staff morale. Thankfully, these tax breaks allow you to afford the equipment you need!
Bancroft Engineering designs and builds welding equipment such as standardized and custom welding machines and much more out of Waukesha, WI—specializing in stand-alone equipment to fully robotic automated systems. Need help automated your welding process or have a special welding application? Give us a call at 262-786-1880, or email: email@example.com to get started.