Section 179 Deduction Limit Raised to $500,000 after Passage of the PATH Act

Section 179 provides major benefits to businesses and individuals acquiring capital equipment. The provision was just extended retroactively for 2015, but you have to act fast.

The Section 179 tax deduction has helped small businesses offset the cost of capital equipment for years, but dysfunction in Congress has frequently caused the statutory purchase limit to seesaw until just before year-end. This year is no exception, but the good news is that the $500,000 purchase price limit has been retroactively applied to 2015 and made permanent with the recent passage of the PATH act.

What is Section 179?

Section179.org does a great job keeping small business owners up-to-date, and cites the following major benefits to this deduction:

• Section 179 is a tax code created to help businesses. 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.
• Section 179 is valid on most types of equipment. There is little sense in allowing a deduction on only obscure equipment, so Section 179 is aimed at general business equipment as well as off-the-shelf software. If you use it in your business, it probably qualifies. See a list of qualifying Section 179 equipment.
• Section 179 can greatly help your bottom line. By deducting the full cost, you lower the amount you pay for equipment and/or software substantially. And these benefits can be further expanded if you choose to lease or finance your equipment & software.
• Section 179 is simple to use. All you need to do is buy (or lease) the equipment, and use a special IRS form. That's it. Details here.
• Section 179 enhancements typically expire at year's end. The various Stimulus Acts over the past few years have included special provisions for Section 179 and Bonus Depreciation, and greatly increased the limits on how much businesses could deduct. But the enhancements usually expire at the end of the year.
• There is simply no better time than now to take advantage of Section 179 and Bonus Depreciation. Why? Because it is a Use-It-or-Lose-It write-off that ends December 31st.

How does Section 179 help pharmacy owners?

Purchasing capital equipment is a significant cash outlay for most pharmacies. Regardless of the ultimate return on investment, the immediate purchase decision has to take the business' cash position into account. Taking the section 179 deduction is a huge help, and can significantly discount the purchase price of pharmacy automation equipment. RxSafe has a handy calculator to figure out the hard savings available through this program.

Check with your accountant on what options are available to you to take advantage of this program in 2015. You can reach out to RxSafe directly at 877-797-2332 or info@rxsafe.com.