2023 Section 179 Tax Incentives for New & Used Capital Equipment

100% of equipment and off-the-shelf software purchased and put into service in 2023 is tax-deductible.

This year, Section 179 of the IRS tax code allows businesses to deduct the up to $1.16 million of qualifying equipment purchased and placed into service during the tax year. Expensing the full amount of the purchase, as opposed to deducting depreciation over multiple years, can greatly reduce taxes owed.

In addition, Bonus Depreciation [Section 168(k)] allows taxpayers additional benefits if the Section 179 purchase allowance of $1.16 million is exceeded. These incentives can help your bottom line and are easy to take advantage of, as long as equipment is purchased and placed into service by the end of the year.

Tax Benefits Breakdown for Flow-Through Company

(Sole Proprietor, Partnership, S-Corporation)

Companies can deduct equipment purchases from their taxable income. For 2023, the annual deduction limit is $1,160,000 for companies purchasing or leasing up to $2,890,000 of equipment. This deduction phases out dollar for dollar from $2,890,000 to $4,050,000 and is not available for companies purchasing over $4,050,000 in equipment. Bonus depreciation is taken after the Section 179 deduction limit has been reached. Schedule: 80% 2023; 60% 2024; 40% 2025; 20% 2026

Tax Benefits Breakdowns for C-Corporations

Companies can deduct equipment purchases from their taxable income. For 2023, the annual limit has increased to $1,160,000. Companies purchasing or leasing up to $2,890,000 of equipment qualify for the deduction each year. Bonus Depreciation allows businesses to immediately deduct 80% of the cost of eligible property in the year it is placed in service. Bonus Depreciation is available for use on both new and used equipment purchase.

	By allowing businesses to deduct the full amount of the purchase price of equipment, (the deduction is at a robust $1,160,000, and will stay there for the remainder of 2023), Section 179 is a fantastic incentive for businesses to purchase, finance, or lease equipment.		All you need to do to use this deduction is buy, finance, or lease new or used equipment, and fill out a special IRS form.
	Our wide range of equipment qualifies for the deduction incentive, but the machines must be purchased and put into service by December 31, 2023.		To qualify for the Section 179 deduction, equipment must be purchased, leased, or financed, and placed into service by midnight on December 31st, 2023.
	By deducting the full cost of the machinery, you lower the amount you pay for equipment substantially.		For the past several years, Congress has raised the deduction limit, let higher limits expire, then raised them again. The various tax and stimulus acts have also affected Section 179 over the years.