Section 179 - Tax Deductions for Business Equipment and Improvement

With the end of the year rapidly approaching, it's unfortunately time to start thinking about taxes.  But with taxes come deductions.  Many business owners are not aware of Section 179, do not think about it until it is too late or are not aware of how comprehensive and beneficial it is.

What is Section 179?
In short, Section 179 allows a business to deduct any equipment that counts as a business improvement.  In the aspect of packaging supplies, this can include stretch wrap machines and dispensers, tape machines/case sealers, and strapping machines and tools.

The primary requirement is that the equipment be purchased in the calendar year for which you will be filing - in this case, by the end of 2013.  As with all tax questions, there are many other details, but this one is pretty simple - as long as it is equipment that helps improve your business, it's eligible, all the way up to $560,000 in total deductions for that calendar year (with single item purchases of up to $139,000).  Section 179 includes both new and used/refurbished equipment.  There is no minimum on the amount of purchase.

What Qualifies for the Section 179 Deduction?
The equipment listed below qualifies for the Section 179 deduction as long as it is purchased and put into use within the calendar year it is claimed as a deduction:

• Equipment (machines, etc) purchased for business use 
• Property attached to your building that is not a structural component of the building (i.e.: a stretch wrap machine, case sealer, large manufacturing tools and equipment)
• Tangible personal property used in business
• Business Vehicles with a gross vehicle weight in excess of 6,000 lbs
• Computers
• Computer "Off-the-Shelf" Software
• Office Furniture
• Office Equipment
• Partial Business Use (equipment that is purchased for business use and personal use: generally, your deduction will be based on the percentage of time you use the equipment for business purposes). 

What Packaging Equipment Qualifies for Section 179?
Following is a general list of what packaging supply equipment would qualify for the Section 179 deduction:

• Stretch Wrap Machines ($3600 and up)
• Case Sealers/Tape Machines ($3000 and up) - Contact Us
• Water-Activated (Gummed) Tape Dispensers ($350 and up)
• Strapping Machines ($800 and up)
• Semi-Automatic
• Automatic
• Stretch Wrap Dispensers ($30 and up)
• Impulse Sealers/Poly Bag Heat Sealers ($75 and up)
• Pneumatic Strapping Tools ($900 and up)
• for Steel
• for Poly
• Battery Operated Strapping Tools ($1800 and up)
• Manual Strapping Tools

We at Packaging Supply Answers can help you with any of these purchases through links to our web sites to the right or the above-noted direct links to the products that are listed on our web sites.  For pricing or quotes on any of these items you can contact us directly or visit our web sites.  We also have another post that tells you more about how to choose a stretch wrap machine and how it can help you and your company.

What Kind of Savings Can Section 179 Offer Me?
The amount you save obviously relates to the amount you spend, but in terms of items referenced above, this is an idea of the amount of savings you can expect from the Section 179 deduction:

Please note that though this chart begins at $150 and ends at $20,000, you can claim deductions for purchases with no minimum and well over $20,000.  More specific calculations can be made by using this free Section 179 calculator.

More Information

You can find more information on Section 179 here (this site is not related to and has no connection to Packaging Supply Answers or any of our eCommerce web sites).  Once you understand how it works, let us know how we can help you improve your business and maximize your investment.  However small or large, we will be happy to assist you.