Using the Section 179 Tax Deduction for New Forklift Purchases in 2022
by James Wilson, on Nov 4, 2022 2:53:00 PM
The end of the calendar year is one of the best times to purchase new forklifts. Taking advantage of the Section 179 tax deduction for your business is one big reason many companies choose to make a year-end purchase. This popular deduction creates a nice opportunity for businesses to refresh or expand their material handling fleets while getting a tax deduction.
Depreciation Costs & Section 179 Deduction Basics
The Section 179 tax deduction enables businesses to write off the costs of new or used equipment purchases up to $1,080,000. By accelerating your depreciation costs, rather than traditional staged approaches, you can reduce a large amount of your company’s tax liability for the tax year. Certain businesses may be able to depreciate the entire purchase in the first year, creating an even larger impact. Be sure to consult your tax advisor and accountant to determine how this deduction applies to your business.
What equipment purchases qualify for Section 179?
The IRS permits businesses to depreciate and deduct all tangible property used during business activities. This can include office equipment, computer hardware, corporate vehicles, and industrial equipment such as forklifts, warehouse racking, and other equipment for your workspace. Anything used to enable income-generating activities should be deductible, but you should still consult your company’s tax professional to ensure compliance.
How much can Section 179 save my business?
The advantage of the Section 179 tax deduction is its ability to drastically increase your upfront tax savings, rather than waiting for a new purchase’s depreciation cycle to advance over several years. Your overall savings can vary based upon various factors - you can use free tools online to get a rough estimate of your savings under this special deduction.
If you want to benefit from this deduction for the 2022 tax year you need to get started on those new purchases. Your equipment must be purchased or financed AND put into service at your business before midnight on December 31, 2022, to qualify. Need to expand your equipment fleet? Check out the new equipment at Southern States Toyotalift and contact us to see how we can meet your material handling needs.
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