Section 26 U.S.C. 179 Tax Deduction

What is the §179 Tax Deduction?

Section 179 helps business owners purchase the equipment their business needs. Before Section 179 was enacted, you could only write off the amount that your gear depreciated each year.  Section 179 allows the taxpayer to write off the full purchase priceas an expense in the very same year that the taxpayer purchases the gear.  Click the following link to use a tax calculator that shows how much you could save: http://www.section179.org/section_179_calculator.html

Also, if you are a film and television professional, and your purchase is being used for a qualified film or television production, then you can take up to $15,000,000 in deductions under Section 181 of the Internal Revenue Code: 26 U.S.C. 181.

Make sure you consult with your tax professional.

How much can I deduct, and for which purchases?

In 2014, you can take up to a $25,000 deduction on new or used gear under Section 179. If you buy more than that amount, you may qualify for a Bonus Depreciation, but the Bonus Depreciation applies to new gear only. Talk with your accountant.

If the gear is for your business, you can get a deduction for it, whether or not it is used or new. Musical instruments and audio equipment are included. Note that if a piece of gear is still deductable if it would be helpful for partly business use and for partly personal use.  For example, headphones you might use at the office, on business trips, or in the studio qualify for a business income-tax deduction, which is determined by the percentage you'd be using the equipment at work.

You can take up to a $15,000,000 deduction under Section 181 if your purchase is being used for a qualified film or television production.  Again, make sure to talk with a tax professional. 

Why should I take advantage of this now? 

If you make the purchase this year, you can get up to $25,000 in deductions under Section 179, or $15,000,000 in deductions under Section 181. Both of these sections' futures for next year are uncertain. Take advantage of it while you can!

Where can I find out more about Section 179 or Section 181? 

For more details visit www.section179.org or law.cornell.edu/uscode/text/26/181.

Questions? Feel free to contact us at info@antiquitymusic.com.