Internal Revenue Code Section 179 allows businesses to expense the full purchase price of qualifying equipment purchased during the tax year. When you buy a piece of qualifying equipment, you will likely be able to deduct the full purchase price on your business income tax return.
Prior to the TCJA, the government capped business taxpayers’ Section 179 deduction at $500,000, with a phase-out beginning at $2 million. The new Act raised the deduction limit to $1 million and the phase-out threshold to $2.5 million. This increases Section 179 benefits for small and mid-size businesses who spend less than $3.5 million per year for equipment.