The Section 179 Deduction is designed to help small business owners invest further into their companies – receiving a tax break for equipment that’s purchased for the company. Under Section 179, a taxpayer is able to treat the cost of equipment as an expense that’s not chargeable to capital account.
To take advantage of Section 179, you need to elect for the deduction by completing Part 1 of Form 4562. Before you do that, if you are electing for listed property, than you need to do Part 5 of the form before Part 1. Listed property is things like automobiles, property used for transportation, computers, and other related peripheral equipment.
Documents you will need:
- 2014 tax return and all amended versions
- Record of equipment identifications including when, for how much, and from who you purchased the equipment.
- Record of when you placed the property into service
- Explanation of what the property is used for and why it is integral to your business.
If you want to revoke your election you can do so by filling an amended return. This can be done without IRS approval. The amended return must be filed with the time permitted and must include any changes to your taxable income caused by the revoking. Once revoked, it cannot be resubmitted.
Make the most out of the Section 179 Deduction and take advantage of the opportunity to invest in your own company.
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