How to Qualify for the IRS Section 179 Deduction When You Lease Equipment

What is an IRS Section 179 Deduction?

Section 179 of the IRS tax code allows businesses to deduct the full purchase price of certain equipment and software financed during the tax year. You can deduct the total purchase price (up to certain taxpayer and business income limits) from your gross income. (The maximum is typically $500,000.) And when you combine the Section 179 deduction with a tax-free lease with payments over several years, you’ll minimize your out-of-pocket cash, and you’ll be able to deduct more than you’ve actually paid during the year! The amount you save in taxes can actually exceed the payments, making this a great decision for your bottom line.

What kind of equipment qualifies for this tax deduction?

Almost any kind of equipment–both new and used–can qualify for the Section 179 deduction. A few examples include tangible personal property, machinery and equipment, property contained in or attached to a building (such as refrigerators, fixtures, office equipment, printing presses and more), storage tanks, livestock and off-the-shelf computer software. Want to know if your equipment qualifies? Contact us for a free consultation.

Learn more about the benefits of leasing.


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