Section 179 is a tax code designed to help businesses acquire the equipment they need to run efficiently. By allowing businesses to deduct the full amount of the purchase price of equipment (up to certain limits), Section 179 is a fantastic incentive for businesses to purchase, finance or lease equipment this year.
The 2015 deduction limit is $25,000, and the spending cap is $200,000. This deduction is available for equipment and software purchased and placed into service by Dec. 31 of each tax year.
For example, if a company purchases new equipment for a total of $8,000. The entire amount is deductible, and the lowered cost of the equipment less the tax savings is $5,200. The cash savings on this amount is $2,800, based upon an assumption of a 35 percent tax bracket.