Section 179 Tax Deduction Act

FORKLIFT PURCHASES – DEDUCT THE FULL PURCHASE AMOUNT – SECTION 179

“Protecting Americans from Tax Hikes Act of 2015” was passed by Congress and the House and signed by President Obama on December 18, 2015. This act expands the Section 179 deduction limit to $500,000.

What is the Section 179 Deduction?

Section 179 of the IRS tax code gives businesses the opportunity to deduct the full purchase price of forklifts and other qualifying business equipment purchased or financed during the tax year. The Section 179 Deduction is aimed primarily at small and mid-sized businesses.

What does Section 179 Do?

Typically, businesses write off equipment in stages through the depreciation cycle. The Section 179 Deduction facilitates the write off of the entire purchase amount up to $500,000 once the Protecting Americans from Tax Hikes Act of 2015 is officially signed into law.

Example Calculation
(Note: This is for example purposes only – see this section 179 tax deduction calculator to estimate your savings)

Purchase Price of New Forklift Fleet	$300,000
Section 179 Deduction	$300,000
Bonus Depreciation Deduction (50% of the difference between purchase price and Section 179 Deduction proposed this tax year)	$0
Total 1st Year Deduction	$300,000
Cash Savings (Deduction x Tax Rate (35%))	$105,000
Forklifts Cost After Tax	$195,000

Is There a Deadline?

Yes! To take advantage of Section 179 for tax year 2017, qualifying equipment must be purchased or financed AND put into service before midnight on December 31, 2017.

Does all Toyota Forklift Equipment Qualify?

The IRS allows for Section 179 depreciation on tangible property, including forklifts, used in a business or income-producing activity. Your customers should see IRS Pub. 946 for more information and restrictions, and consult a tax advisor.

For more information, visit www.section179.org. Consult your tax professional for additional details.