What You Need to Know About Section 179 Deduction on Dump Trailers
When it comes to dealing with the IRS, it is never an easy task. Tax season can stress us all, but as a business owner, big or small, the thought of a potential audit is terrifying.
Saving money is never a bad thing, and with a section 179 deduction, you won’t have to worry about a potential loss.
If you purchased a dump trailer and use it for commercial use more than 50% of the time, you could potentially qualify for the Section 179 Tax Deduction.
So, keep reading to find out more about this potential tax write off.
What Is the Section 179 Deduction?
The section 179 deduction lets businesses expedite their saving to the point where it reduces the cost of a purchase.
The savings that come with large commercial purchases, such as trailers in our case, are typically written-off every year in our tax returns as depreciating value. Meaning small savings year after year.
While it is always nice to save, sometimes a lump sum of cash can be the best option. Especially when it can be allocated towards a large equipment purchase.
In short, section 179 deduction takes all the potential tax deductions you could have made with your new equipment, or new to you equipment, and gives it to you upfront to help with the purchase of it.
Do I Qualify?
There are certain criteria that need to be met in order to qualify for the section 179 deduction.
New-to-you trailers are allowed for the 179 deductions, so long as they have a useful life of at least one year. This means you can’t buy a junker and have it sit in a parking spot for a year. The trailer needs to be used for what it is intended to be used for.
The asset, trailer, must be used for business at least 50% of the time or else you risk losing the deduction altogether.
Like with many things in government, this one also comes with a catch. The amount deducted from your total purchase can not exceed the business’s income for the year.
The end of year tax write-off needs to be made the year of your purchase. Not the next year. If you do not take advantage of the purchase the year of, you lose the deduction.
Using the Section 179 Deduction is a great aid to small businesses. Crediting large purchases can be a large help to many looking to grow their business and services provided.
Minimizing Loss
No one likes losing money, especially to the IRS. Using the section 179 deduction is not some loophole you need to pay an accountant to complete. It is a form you can print from the IRS website, and even comes with instructions.
The first step to saving money is learning more about this potential tax write off and see if you qualify. After that, you just need to fill and submit the form.
Interested in learning more about trailers and other helpful tips? Contact us for a quote or additional information regarding your trailer needs.