Guide: Cut Taxes When You Buy Before the End of the Year

The latest tax reform package that was signed into law gives deductions to businesses that purchase qualifying equipment, like digital signage and billboards. Its purpose is to motivate American businesses to invest in equipment that grows their businesses, improves their bottom lines, and helps to stimulate the economy as a result. This legislation can provide potential tax savings for your business.

Section 179 also allows for a Special Depreciation that offers an additional deduction through 2022. With the Special Depreciation, businesses can depreciate 100% of the cost of equipment above the standard depreciation cap as long as it was acquired and put into service before the end of the tax year in which they take the deduction. After that, the Special Depreciation will phase down 20% each year before disappearing at the end of the 2026 tax year.

Here’s how that translates to savings for your company. Let’s say you invest $50,000 in new digital signage. Your total first year deduction is the full amount - $50,000. Assuming a 32% tax bracket, this would give you a cash savings of $16,000 and effectively lower the cost of your investment to $34,000.

To learn more about how to put Section 179 deductions to work for your business, download our free guide.