You can save money on your taxes when you purchase equipment by taking advantage of Section 179 of the IRS tax code. Section 179 allows business taxpayers to deduct the cost of certain property as an expense when the property is placed in service. It does not have to be depreciated out over several years. The Section 179 deduction applies to tangible personal property such as machinery and equipment purchased or leased for use in a trade or business, and if the taxpayer elects, qualified real property.
For tax years beginning after 2017, the TCJA increased the maximum Section 179 expense deduction from $500,000 to $1 million. The phase-out limit increased from $2 million to $2.5 million. These amounts are indexed for inflation for tax years beginning after 2018. For more information, see