Section 179

Let’s save you some money on your 2022 tax bill.

This tax-savings strategy is for those of you that own your business. (Yes, this may even apply to those of you that are paid via a 1099-NEC to your personal name and file your “business” as part of your personal return – Schedule C.)

If your business is profitable, and you’re concerned about the potential tax implications, you MAY be able to write-off/expense the entire purchase (or most) of a car or truck that is purchased for your business.

Here is how it works:

Typically, when your business makes a large purchase, you will need to capitalize that purchase, which means you only get to expense the purchase price (“depreciation”) over a number of years.

Not so good.

But IRS Section 179 allows companies to write-off the full (or most of the) purchase price of qualifying equipment/vehicles in the year of purchase.

Here is one of the best parts:

It’s a phantom expense.

Let me explain.

Even if you don’t actually pay for the entire vehicle in 2022 (i.e. you finance it), you may still be able to use Section 179, since the asset is owned by your business.

Imagine gaining a valuable expense for your business (saving tax money), without having to actually fork over all of the money in the current year for the expense!

There are a number of rules regarding this topic (including which vehicles qualify and for how much $), so it’s best if you consult with your tax professional before doing anything.

If used correctly, though, this could be a game-changer for the tax bill of many businesses in 2022

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