Why You Should Purchase Equipment Before Year End!

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Why You Should Purchase Equipment Before Year End!

The new year is only weeks away. Many business owners are beginning to realize they need to acquire new equipment before January 1st to take advantage of Section 179 tax write-offs. The 100-percent depreciation will stay in effect until January 1, 2023, after which, the first-year bonus depreciation deduction will decrease. In order to be compliant, part of the equipment package needs to be on the customer’s floor by the end of 2022. This does not mean the equipment needs to be installed or the full package delivered to their floor by that time. Section 179 allows you to take an immediate deduction for business expenses such as equipment and lowers current-year tax liability instead of depreciating it over future tax years.

Dust Hog dust collector installed

Now is the time to order the equipment you have been putting off until next year.  Adding capital equipment to your facility may be one of the best and smartest investments you can make before this year ends. Some of the many benefits include:

  • Reduced equipment maintenance
  • Improved shop safety and cleanliness
  • Helps you meet compliance regulations
  • Provides ongoing value
  • Improved employee retention and satisfaction

As we approach the final stretch of 2022, consider why now is a good time to purchase equipment. Read the two most important reasons why it makes sense:

1. SAVE ON YOUR TAXES

If you’ve been contemplating purchasing capital equipment, like a dust collector, or tube forming machinery, make the purchase before December 31st. The Internal Revenue Service has a provision for capital equipment and asset purchases referred to as Section 179.

Section 179 of the U.S. Internal Revenue Code (IRC) is an immediate expense deduction that business owners can take for purchases of depreciable business equipment rather than capitalizing and depreciating the asset over a period of time. This deduction can be taken if the piece of equipment is purchased or financed, and the full amount of the purchase price is eligible for the deduction1.

SECTION 179 EXPLAINED 

  • Allows businesses to take an immediate deduction for business expenses related to depreciable assets such as equipment
  • Allows businesses to lower their current-year tax liability instead of capitalizing an asset and depreciating it over time in future tax years
  • Limited to a maximum deduction of $1,050,000 and a value of property purchased to $2,620,000 for the year 2021

2. IN-STOCK INVENTORY

At AM Industrial, our inventory is in stock and on our floor, allowing you to have your equipment fast! No waiting or long lead times as with other companies.

Before 2022 has ended, consider investing in capital equipment for your business. Contact us today to discuss your tube machinery and dust collection needs. 

 

**All businesses are different, please consult with your CPA.

 

  1. Adam Hayes, Section 179: Definition, How It Works, and Example. July 26, 2022, https://www.investopedia.com/terms/s/section-179.asp
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