Congress's Elf on the Shelf: The Elusive Section 179 Tax Break is Up for Changes. Again.
Update: Thanks to the new Tax Cuts and Jobs Act of 2017 signed into law in December, the Bonus Depreciation amount is now 100%, is effective for equipment/software placed in service on or after September 28, 2017, and includes used equipment. Simply make your purchase and enjoy your huge tax deduction and savings! Find out how Bonus Depreciation eclipses Section 179.
Have you ever participated in the “Elf on the Shelf” tradition where you hide an elf in a different spot each day in December as part of the Christmas spirit with the kids? Each morning, the kids bound out of bed to find the elf’s new hiding place. As kids get older and the game gets more predictable, they lose interest and shift their focus to the higher meaning of the holiday.
Now replace the elf with Section 179, and Congress is the parent who moves the fate of this tax break each day until they adjourn on December 18th. Though the House voted earlier this year to make this tax break permanent and at $500,000 , no one really knows if this will become law. If you recall, Congress raised the $25,000 expensing limit to $500,000 for the 2014 tax year with only 12 days left in the year. That’s not much time to make a large purchase and place the purchase in service before your tax year runs out.
It would be nice for Congress to end this yearly guessing game, but no one should hold their breath for that to happen. It has caused a lot of business owners to delay their purchasing decisions and impede forward motion. Many are tired of this moving target and have matured to a higher focus on the value an equipment purchase to their business.
Our job as a finance company is to make sure everyone knows their $1 buyout lease or an Equipment Finance Agreement is eligible for the Section 179 deduction, and since we are not tax experts, we always tell our customers to consult their tax person on the details. But our higher calling is to provide a meaningful service to our customers that helps them propel their enterprises forward with the fewest distractions possible. Go with the certainty of what your equipment purchase will mean for your business and forego the distractions of the Section 179 elf!
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