What information is contained in IRS section 179?


Quick Answer

Section 179 of the Internal Revenue Service tax code contains information about the deductions that businesses can make from their gross income for equipment or software purchased during a tax year. This section consists of tax incentives created by the government to encourage businesses to invest in themselves, states Section179.org.

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Full Answer

Section 179 contains guidelines that businesses use to deduct the purchase prices of equipment and software from their gross incomes when calculating the total taxable incomes. Conventionally, businesses wrote off equipment through a series of deductions spanning several years, notes Section179.org. Section 179 allows businesses to write off the full costs of equipment within the year of purchase. The section directs that businesses can only write off a maximum of $25,000 for equipment purchases not exceeding $200,000, as of 2015.

Section 179 contains specific information about the property that qualifies for deductions, the purchase amounts that different business organizations can write off, and the procedure for electing the deductions, states the IRS. The section outlines eligible property as property that a business purchases for commercial use. The section also outlines specific examples of eligible property such as machinery, livestock and grocery store counters. Section 179 also contains deduction guidelines for married individuals, partnerships, S corporations and other corporations.

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