When you’re running a construction or landscaping business, you know that every dollar counts. That’s why it’s essential to take advantage of tax deductions like Section 179. If you’ve heard the term but are wondering how it works, or how you can use it to save on equipment purchases, you’ve come to the right place. We’re here to break it down in a way that’s easy to understand — no tax jargon required.

What is Section 179?

At its core, Section 179 allows business owners to deduct the full purchase price of qualifying equipment and software purchased or financed during the tax year. Instead of depreciating the cost of equipment over several years, you can deduct the entire amount in the year you buy it. For owner-operators in construction and landscaping, that could mean huge savings.

In 2024, the Section 179 deduction limit is up to $1,160,000. That’s right — more than a million dollars of eligible purchases can be written off. The total equipment purchase cap is $2,890,000, meaning businesses can deduct the full cost if their equipment purchases don’t exceed this amount. After that, the deduction reduces dollar-for-dollar.

Bonus Depreciation for 2024

If your equipment purchases exceed the Section 179 cap, you’re not out of luck. Bonus depreciation kicks in, allowing you to deduct an additional 80% of the cost of qualifying new and used equipment. Bonus depreciation is typically applied after you reach the Section 179 limit, which is great news if you’re planning a big investment this year.

What Qualifies for Section 179?

Pretty much anything your business needs to get the job done — so long as it’s tangible and used for work purposes. This includes:

• Heavy equipment (think bulldozers, excavators, loaders)
• Trucks and vehicles weighing over 6,000 pounds (no fancy cars here!)
• Tools and machinery you rely on for daily operations
• Computers and office equipment if you need to run the business side smoothly
• Software (as long as it’s off-the-shelf and not custom-built)

The key is that the equipment must be put to use in your business during the year you claim the deduction. So, if you’re thinking about upgrading your fleet or finally buying that machine you’ve had your eye on, 2024 is a great year to do it. 

For more information about which equipment qualifies, read the IRS guidelines here. 

Trade-In Equipment? No Problem.

One of the questions we often get is whether you can take the Section 179 deduction when you trade in old equipment for new. The answer is yes, and here’s why it matters. When you trade in old equipment, the trade-in value reduces the overall cost of your new equipment, which can help you get even more out of the deduction.

For example, let’s say you trade in a loader worth $50,000 for a new one priced at $150,000. After the trade, your cost is $100,000 — eligible for a Section 179 deduction. You’ve upgraded your fleet and scored a tax break in the process.

How to Claim Section 179

Claiming Section 179 is simpler than it sounds. You’ll just need to fill out IRS Form 4562 when you file your taxes. Keep good records of the equipment purchased, when it was put into service and its business use percentage.

It’s always a good idea to consult your tax advisor before filing, especially if you’re making significant purchases. However, with the right guidance, Section 179 can be a straightforward way to lower your tax bill while growing your business.

Why Now is the Time to Invest

Here at Southeastern Equipment, we know that timing can make all the difference. With the Section 179 deduction and bonus depreciation both at play, 2024 is a prime year to invest in new or upgraded equipment. Whether you’re looking to expand your fleet or upgrade to more efficient models, this tax break could significantly impact your bottom line.

Our local team is here to help you figure out what equipment best fits your needs and budget. Plus, with our trade-in programs, you can maximize your savings and get more out of your old machines. Need more info? Check out our available equipment and get in touch with your local sales rep. We’re just a call or click away.

Final Thoughts: Don’t Wait

The Section 179 deduction is a fantastic opportunity to invest in your business while taking advantage of serious tax savings. Whether you’re in construction, landscaping, or any field that relies on heavy equipment, this deduction is designed to help your business grow. So don’t wait — talk to your tax advisor and see how you can benefit from Section 179 in 2024.

Want to see what’s available? Browse our latest inventory and let Southeastern Equipment help you make the most of your Section 179 deduction this year.