Considering a New PJ Trailer To Expand Your Business?
If you are an independent contractor or own a small business, the end of the year is your last chance to make capital investments that could lower your overall tax bill. Keep reading to learn how Section 179 is your opportunity to purchase a new PJ trailer and possibly receive some impressive tax savings, too!
What Is the Section 179 Deduction?
Section 179 of the IRS tax code was created by the U.S. government to encourage businesses to buy equipment and reinvest in themselves. It allows businesses to deduct the full purchase price of qualifying business equipment and assets purchased or financed during the corresponding tax year. That means that if you buy (or lease) a piece of qualifying equipment, like a trailer, you can deduct the FULL PURCHASE PRICE from your gross income.
Section 179 at a Glance for 2023
For 2023, The Senate Finance Committee has increased the deduction limit for Section 179 to $1.16 million, an $80,000 increase from 2022. The total equipment purchase limit has also been increased for 2023 to $2.89 million from $2.7 million in 2022.
This means businesses that spend $2.7 million or less on specified total equipment purchases may be able to deduct the full cost of equipment from their 2023 taxes, up to $1.16 million.
What Trailers Qualify for Section 179?
Whether you are in the market for a utility, heavy-duty dump, or gooseneck trailer, nearly all new and used trailer models could qualify for Section 179. However, there are some essential qualifications you should keep in mind while shopping for your trailer, including:
- Trailer purchases or leases must be completed by December 31, 2023
- You will need to take receipt of your trailer by December 31, 2023
- Trailers must be used for your business at least 50% of the time
How to Get Started
*These statements present a potential tax scenario based on typical assumptions that may or may not apply to your customers’ business. This information is not tax advice. The indicated tax treatment applies only to transactions deemed to reflect a purchase of the equipment or a capitalized lease-purchase transaction. Please consult your tax advisor to determine the tax ramifications for your business or your customers’ business.