In today’s competitive business landscape, investing in top-quality equipment is essential for staying ahead. But what if you could upgrade your fleet while simultaneously reaping significant tax benefits? We’re equipped to meet all your job site needs with our extensive range of new and used equipment—from construction machinery to efficient portable power solutions, compact dumpers, and asphalt pavers. 

Our commitment goes beyond providing machinery;  we also understand the importance of maximizing your investment. Many customers explore financial tools like the Section 179 tax deduction when purchasing qualifying equipment. 

Let’s explore how the Section 179 tax deduction can benefit your business and help you make informed decisions for growth!

Background on the 179 Tax Credit

To understand the potential benefits of the Section 179 deduction, it’s important to know its purpose. The Section 179 tax deduction was created to support businesses in acquiring equipment, software, and other business assets by allowing them to deduct the full cost in one year. This deduction simplifies taxes for your business and provides financial benefits, as long as the equipment is put into service during the tax year. 

To be eligible for this deduction:

• Equipment must be purchased for business use
• It must be used more than 50% for business purposes
• The equipment must be put into service in the same tax year as the purchase

​​For 2024, the Section 179 deduction limit is $1,220,000, with a spending cap of $3,050,000. This means businesses can potentially write off the entire cost of qualifying equipment purchases up to $1,220,000, providing significant tax savings and encouraging capital investments. The goal of this deduction is to incentivize businesses to invest in themselves by making it more affordable to acquire new equipment and technology.

Income Limitation for Section 179

While the Section 179 deduction offers substantial benefits, it’s essential to note that it cannot exceed your taxable income from your active trade or business. In other words, you cannot use this deduction to create or increase a net loss. For example, if your business has a taxable income of $800,000, you can only deduct up to that amount, even if you purchased eligible equipment worth more. Any unused deduction can be carried forward to future tax years.

Bonus Depreciation

In addition to Section 179, another valuable tax incentive is bonus depreciation. This allows businesses to deduct a large percentage of the purchase price of eligible assets in the first year of service. For 2024, the bonus depreciation rate is 60% of the purchase price, and it applies to both new and used equipment. Unlike Section 179, there’s no spending cap for bonus depreciation, and it can be used to create a net operating loss.

The bonus depreciation rate is scheduled to phase out as follows:

• 2025: 40%
• 2026: 20%
• 2027 and beyond: 0%

This gradual reduction underscores the importance of taking advantage of this tax benefit while it’s still available at higher rates.

Ascendum Machinery and the 179 Tax Credit

All products purchased from Ascendum Machinery qualify as eligible property for the Section 179 deduction. Let’s consider an example:

At Ascendum Machinery, we proudly provide the Sennebogen 870 E Hybrid, designed for flexible and challenging material handling tasks in ports. This machine features Sennebogen’s Green Hybrid energy recovery system, which reduces engine power requirements and saves up to 30% of energy.

If you purchased this machine for your business this year at a price of $1,387,500, assuming a 25% tax bracket, the Section 179 deduction would allow you to potentially save $346,875, bringing the real cost of the equipment to $1,040,625. This deduction helps operators build fleets that maximize their operations while improving cash flow and supporting overall business growth.

How to Claim the Section 179 Deduction for Your Ascendum Machinery Purchase

Now that you understand how beneficial this deduction can be, let’s discuss how you can claim it for your Ascendum Machinery purchase. To do so, you must first purchase your equipment and put it into service before December 31 of the tax year. It’s crucial to ensure that the equipment is used for business purposes more than 50% of the time. Keep detailed records of the purchase, including the invoice or bill of sale, the date of purchase and the date it was put into service, the cost of the equipment, and a description of how it’s used in your business. You’ll need to fill out IRS Form 4562 to claim the deduction. To claim bonus depreciation, you’ll also use IRS Form 4562. Unlike Section 179, bonus depreciation is automatically applied unless you opt out of it. Given the complexity of tax regulations, it’s highly recommended to consult with a tax professional to ensure accurate filing and to maximize your benefit from this deduction.

Maximize Your Tax Benefits for Business Growth

Maximizing the Section 179 tax deduction alongside your investment in equipment from Ascendum Machinery can significantly enhance your business’s financial position. This deduction not only reduces your tax liability but also improves cash flow, allowing for reinvestment in your operations.

As the tax year draws to a close, now is the perfect time to assess your equipment needs and explore how the Section 179 deduction can work for you. Remember to consult with a tax professional to ensure you maximize your benefits and navigate the complexities of tax regulations effectively.

At Ascendum Machinery, we are committed to being more than just an equipment provider; we are your partners in progress. Our knowledgeable team is ready to assist you in understanding the Section 179 deduction and finding the right equipment to optimize your business. Together, let’s build a stronger, more efficient, and more profitable future for your business.

Learn more about our product offerings and how we can support your growth!