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Grow Your Small Business With Section 179 Deduction

Published on Nov 10, 2022 by Talia Mushinsky

Small business owners can file new equipment they purchased in 2022 as a deduction.  This deduction is offered to encourage all small business owners to invest in new equipment so that they can further grow their business.

 

What is Section 179?

Section 179 allows small business owners to deduct the newly purchased equipment as an expense when they file income taxes.  Used equipment may qualify, as long as it’s “new to you” at the time of purchase.  

 

The following equipment is eligible for Section 179: 

  • Business vehicles

  • Horticulture structures

  • Office equipment

  • Computers

  • Off-the-shelf software

  • Machinery

**Consult your tax professional to know specifically which equipment qualifies**

 

How to Get The Deduction

Small business owners who have purchased and utilized new/used equipment this past year, can elect this deduction by filling out Part 1 of IRS form 4562.  They can choose to deduct all or part of the cost of equipment purchased, or financed, in 2022.

 

2022 IRS Limitations for Section 179:

  • Maximum deduction amount:  $1,080,000

  • Maximum equipment purchase amount:  $2,700,000

 

Vehicles That Qualify

All qualified business vehicles must be used at least 50% of the time for business purposes.  If the business vehicle is used more than 50% of the time, the deduction allowance will be adjusted accordingly.  The Vehicles’ weight limitations for Section 179 are based on the manufacturer’s Gross Vehicle Weight Rating (GVWR), which can usually be found either inside the driver’s side door or on the manufacturer’s website.

  • Small Vehicles:  GVWR is less than 6,000 lbs

  • Heavy Vehicles: GVWR between 6,000 lbs - 14,000 lbs

  • Specialty Vehicles:  GVWR greater than 14,000 lbs

**Consult your tax professional to know specifically which vehicles qualify**

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