There’s Still Time to End This Awful Year on a High Note
A lot of equipment is eligible for Section 179 tax deductions. Even equipment you buy today!
It’s safe to say that literally no one will be sad to see 2020 finally come to an end. The virus, the quarantines, the travel restrictions, the mass toilet paper shortages … very little actually went right this year, and we’re all happy to show 2020 the door. So it might seem strange when we tell you that an IRS tax code can offer a small hint of salvation.
If you follow this blog regularly, chances are you think we sound like a broken record here. We’ve talked about the Section 179 deduction in depth in the past, even somewhat recently. But there’s a reason we keep hammering away on promoting the use of this IRS tax code … Section 179 is something every event and party rental operator needs to know about.
Section 179 lets you write off your equipment purchases all at once, rather than trickling them in through depreciation. It allows you to write off the full purchase price of equipment from your gross income. And that means you’ll save a lot of money when filing your 2020 taxes.
Most of your equipment qualifies for Section 179 deductions, including your big ticket items like commercial inflatables, party tents, and folding tables and chairs. And with a deduction limit of $1,040,000 and an equipment spending cap of $2,590,000, the vast majority of rental operators can use these deductions on nearly everything they bought in 2020.
We’re not tax experts by any means, so here’s a link where you can learn about Section 179 deductions in more detail.
Your Purchases Qualify for Section 179 Through December!
Here’s more good news: These deductions are still available on purchases you make today, as of this article being written. Equipment purchased at any time in 2020 qualifies for these Section 179 deductions. If you purchased equipment between January 1st and December 31st of 2020, and if it qualifies, it counts.
Let’s say you went off right now and bought some equipment. Say, a $3,200 inflatable water slide, a $2,500 bounce house with slide combo, and a $2,300 20x20 frame tent. That’s $8,000 worth of equipment. And that’s $8,000 you can knock out of your taxable gross income for the year, too.
Did you buy other equipment this year? That counts too! As long as the equipment qualifies for these deductions and you bought it in the year 2020, it can be applied toward your Section 179 deduction.
Again, we’re not tax experts. We aren’t going to explain all of this the way a tax professional could. So gather up all of your receipts and take them to your tax accountant, and ask them about Section 179 deductions. You’ll be surprised by how much money these deductions end up saving you and your business!