Video instructions and help with filling out and completing Fill Form 4797 Mileage

Instructions and Help about Fill Form 4797 Mileage

Hello thank you for joining me for another on-demand training video our topic today is section 179 what is that you asked well section 179 is the shorthand for business tax deductions on property with 2018 drawing to a close in just over a month now is the time to consider any equipment your small business should purchase to maximize this year's section 179 benefits more details on that shortly first let's take a look at our roadmap for this session here's what we'll be covering we'll start with Fast Facts if you're pressed for time and don't want specifics watch through this part of the presentation however of course I suggest you stick around for the fuller details including what is section 179 what are the benefits what are the guidelines for 2018 what kind of property is eligible and the resources where can I learn more fast facts okay here are the bare-bones basics section 179 is a tax code created to help businesses it's valid on most types of equipment can greatly help your bottom line it's simple to use it must be used by the end of the year for this year's benefits and it can change from year to year now let's dive into the details so what is section 179 here's the gist section 179 of the United States Internal Revenue Code allows a taxpayer to elect to deduct the cost of certain types of property on their income taxes as an expense rather than requiring the cost of the property be capitalized and depreciated now let's highlight and explain some key terms in this paragraph first deduct these are the subtractions you can take from your taxes to lower your annual bill next certain types of property there are many types of property costs that can be ducted under 1 7 9 some examples equipment vehicles computers office furniture and some attached property in a few minutes we'll go in depth of what is eligible under section 179 third let's define capitalized - capitalized is to record a cost or expense on the balance sheet for the purposes of delaying full recognition of the expense in general capitalizing expenses is beneficial as companies acquiring new assets with long term lifespans can gradually write-off or amortize the costs and finally we have depreciated depreciation is an accounting method of allocating the cost of a tangible asset over its useful life and is used to account for declines in value businesses depreciate long term assets for both tax and accounting purposes this is the exact idea in the common knowledge that a new car depreciates the second you drive it off the dealer's lot so that is the spirit and intent of section 179 and you're probably already beginning to wrap your head around the benefits so let's spell them out specifically as I mentioned early on some benefits are section 179 is valid on most types of property it can greatly help your bottom line and it is simple to use but there are a few more section 179 allows you to reduce your tax bill immediately and substantially and it offers specific guidelines that allow you a great deal of flexibility let's look now at those specific guidelines for 2018 in 2018 there is a spending cap of 2.5 million dollars and you may deduct up to 1 million dollars and the bonus deduction is 100 percent what is this well the bonus depreciation is generally taken after the section one seven nine spending cap is reached the bonus depreciation is available for both new and used equipment now an important note these guidelines typically change each year and have done so every year since the inception of section 179 back in 2007 now let's dig into the specifics of what property is eligible for the deduction just about any type of property you can think of for your use in your business is eligible for deduction under section 179 including construction equipment farm equipment medical equipment printing equipment vehicles tools office supplies furniture computers mobile devices other electronics and software if there's more but let's spend a few moments on software because it is the most popular use of the section 179 deduction in general terms any off-the-shelf computer software that one is not custom design and two is available to the general public qualifies for the section 179 deduction in the year that you put the software into service for basic eligibility the software must meet all the following general specifications it must be purchased or financed with specific qualifying lease or loan the software must be used in your business for income producing activity it must have a determinable useful life and it must be expected to last more than one year in addition these specific stipulations must be met it must be readily available for purchase by the general public the software must be subject to non-exclusive license for example it's not just yours and the software must not have been substantially modified last what software does qualify first custom code software that is written or highly customized for your company is not eligible databases or similar are not considered deductible computer software unless it is in the public domain and is incidental to the operation of otherwise qualified software and websites however with the rise of online website builders this make change so be sure to check your section 179 resources regularly or ask your accountant let's now turn to our final section on resources and where you can learn more there are three terrific resources for additional information and guidance the first is section 179 org this is the place to start for all of your information about section 179 next is investopedia a terrific all-around resource for businesses third and last is the IRS itself for the specific technical documentation on section 179 in particular publication 946 click pause for a moment and note the