2024 Section 179 Tax Incentives

Take Advantage While There’s Still Time

Section 179 was created for small to mid-sized manufacturing and distribution organizations.  Section 179 allows organizations to deduct the total cost of qualifying equipment and property in 2024, rather than depreciating it over several years, which provides small to mid-sized companies immediate tax relief and improved cash flow. For 2024, the maximum deduction under Section 179 has increased to $1.22M, up from $1.16M in 2023 (adjusted for inflation). Larger manufacturers that have an annualized purchase total exceeding $3.05M often find limitations using Section 179, and therefore may gravitate more towards 60% Bonus Depreciation in 2024. Section 179 and Bonus Depreciation don’t have to be used together; a business does have the right to use one or the other.

Qualifying Equipment and Assets:

  • Tangible property including machinery, buildings, vehicles, equipment, and furniture.
  • Intangible property includes copyrights, patents, and computer software.
  • Property used for combined personal and business purposes must be primarily used for business over 50% of the time, and only the business use portion can be deducted.

Qualifying Equipment can only be deducted in 2024 if it is delivered, installed and operational by 12/31/2024.  

As always, it’s important for manufacturers and distributors to consult their tax advisors about their taxable income projections before making a fixed asset purchase to determine if Section 179 and/or 60% Bonus Depreciation can and should be used.

Section 179 expense limits are now permanent parts of the tax code.  Limits for 2025 Section 179 have yet to be determined because the IRS is expected to adjust for inflation.

Bonus Depreciation will reduce from 60% in 2024 to 40% in 2025, 20% in 2026, and ZERO in 2027.

Stock Machines for Immediate Delivery IRS Form 4562: Depreciation and Amortization Instructions for Completing Form 4562

* All subject to IRS limitations. Consult your tax advisor to determine the availability of these potential benefits in your particular tax situation. To ensure compliance with requirements imposed by the IRS, we inform you that, unless expressly stated otherwise, any U.S. Federal tax advice contained in this communication (including any appendages hereto) is not intended or written to be used, and cannot be used, for the purpose of: (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed therin