Section 179 is a tax deduction that allows businesses to write off the full purchase price of qualifying equipment or software in the year it was purchased instead of capitalizing and depreciating the asset over a period of time. This deduction can help small- to medium-sized businesses alleviate some of the financial burden of acquiring a lot of equipment or software as well as incentivize them to act quickly at the end of a tax year. Here are some key points to keep in mind about Section 179:

• The deduction is good on new and used equipment, as well as off-the-shelf software.
• The deduction can be taken if the piece of equipment is purchased or financed and the full amount of the purchase price is eligible for the deduction.
• The deduction is limited to a maximum deduction of $1,080,000 and a value of property purchased to $2,700,000 for the year 2022.
• Section 179 does come with limits – there are caps to the total amount written off, and limits to the total amount of the equipment purchased.
• The deduction begins to phase out on a dollar-for-dollar basis after a certain amount is spent by a given business, so this makes it a true small and medium-sized business deduction.
• All businesses that purchase, finance, and/or lease new or used business equipment during the tax year should qualify for the Section 179 Deduction (assuming they spend less than the limit) .
• Section 179 is especially appealing because small businesses gain the ability to deduct the full purchase price of equipment or software before paying off their loans.
• Section 179 is relevant to many households, as there are many ways of setting up a business, all of which can affect taxes.

It is important to note that not all types of equipment or software qualify for Section 179, and there are some categories of expenses that you want to consider carefully before counting on a deduction.