As a business owner, there are some tax beneifts you can get when you make capital purchases. One of those is Section 179 of the US Tax Code. Print shops can take advantage of Section 179 for their capital purchases.
So how does it work?
As defined in Wikipedia:
“Section 179 of the United States Internal Revenue Code (26 U.S.C. § 179), 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 to be capitalized and depreciated. This property is generally limited to tangible, depreciable, personal property which is acquired by purchase for use in the active conduct of a trade or business.[1] Buildings were not eligible for section 179 deductions prior to the passage of the Small Business Jobs Act of 2010; however, qualified real property may be deducted now.[2]”
So, if you need to purchase a UV Coating Machine, a new Roll Laminator, or a Round Corner Cutter, as examples, now is the time to do it before December 31, 2016. The amount you can spend is quite generous.
For example:
Triumph 7260 Hydraulic Paper Cutter
This is a great paper cutter. It’s a 28-inch programmable paper cutter with hydraulic clamp, power back gauge, electronic control module, and IR safety light beams on the front table. You can cut stacks of paper and have a perfect cut. It’s a high-cost cutter, but one of the best on the market.
If you take advantage of Section 179, this is what it would look like for you:
Cost of Equipment: $23,999.00
Section 179 Deduction: $23,999.00
Bonus Depreciation Deduction: $0
(updated to 50% via PATH Act of 2015)
Normal 1st Year Depreciation: $0
____________________________________________
Total First-Year Deduction: $23,999.00
Cash Savings on your Purchase: $8,399.65
(assuming a 35% tax bracket)
Lowered Cost of Equipment: *$15,599.35
Let’s take a look at another example for your print shop, a UV coating machine:
Tec Lighting 16? TruCoat Auto Feed UV Coating System
With the 16” TruCoat auto feed UV Coating machine, you can pretty much do any project that comes through your door. With the auto-feed attachment included, you can automate the process further from print to coating.
Cost of Equipment: $23,900.00
Section 179 Deduction: $23,900.00
Bonus Depreciation Deduction: $0
(updated to 50% via PATH Act of 2015)
Normal 1st Year Depreciation: $0
____________________________________________
Total First Year Deduction: $23,900.00
Cash Savings on your Purchase: $8,365.00
Lowered Cost of Equipment: *$15,535.00
Have you been considering a wide format laminator? Here is one to consider:
D and K Expression™ 55 Plus Commercial Roll Laminator
The EXP 55 Plus Laminator provides a versatile laminating and mounting solution for sign shops and other graphic finishing industries. A top heated roller allows for single sided lamination of thermal or pressure sensitive films to self adhesive vinyls and related print media.
Cost of Equipment: $9,500.00
Section 179 Deduction: $9,500.00
Bonus Depreciation Deduction: $0
(updated to 50% via PATH Act of 2015)
Normal 1st Year Depreciation: $0
____________________________________________
Total First Year Deduction: $9,500.00
Cash Savings on your Purchase: $3,325.00
Lowered Cost of Equipment: *$6,175.00
So, if you are considering a machine purchase, this is the year to do it with a generous Section 179 deduction.
*These are estimates only. For exact saving, please consult your tax accountant.
