Section 179 Tax Advantages

Posted on November 6, 2018

Section 179 allows for tax advantages on the purchase of new and used equipment.

That’s right, there’s more than one advantage! In fact, there are two key tax benefits.

The first key tax benefit is Section 179.  Section 179 provides the allowable deduction limit of $1,000,000 on the cost of new and used capital equipment purchased with an investment cap of $2,500,000.

The second tax advantage is Bonus Depreciation. Bonus Depreciation can be combined with the Section 179 deduction for additional savings! It enables you to take additional depreciation on new and used (new to you) capital equipment purchases. Bonus depreciation is currently scheduled to phase out over the next 10 years.  In fact, equipment placed in service September 2017 through December 31, 2022 has bonus depreciation of 100%. However, every year thereafter, that bonus depreciation decreases by 20%. Starting January 1, 2027 and on, the bonus depreciation will be 0%.

Let’s take a glance at the tax savings introduced by bonus depreciation, along with Section 179.

The Tax Savings using Section 179 alone is $320,000. Meanwhile, the total first-year tax savings using both Section 179, and Bonus Depreciation, is $480,000!

The intended purpose of this tax benefit was to stimulate the economy. The money you save in the short term can be reinvested in capital improvements, expansion projects, and more, so don’t wait — buy that new or used equipment today!

Disclaimer: The information in this flyer is provided as a customer service by your John Deere dealer and John Deere Financial. However, it is not and should not be construed as tax advice. We strongly recommend that you consult with your tax advisor regarding how these tax-saving opportunities apply in your situation.