Disclaimer: I’m not an accountant and this isn’t tax advice. Tax policies change from year to year, and they can vary depending on your entity type, industry, and other factors. Make sure to consult an accountant or tax attorney before making any decisions.
Traditionally, when you purchased property for your business, you could only depreciate the expense over its useful life. For example, if you purchased new tables and chairs for your juice bar and they were expected to have a 10 year life span, you could depreciate the expense over 10 years. So, you could “write off” 10% of the purchase every year for 10 years – meaning you would decrease your tax liability a little bit each year for 10 years.
However under the new-ish Section 179 updates, you may deduct the entire purchase amount in the year it’s purchased. Section 179 is limited to certain types of equipment, such as cars, office furniture, business machinery (like juice machines), and computer equipment you use to run your company.
Here is how you can write off the entire purchase price of a commercial juice machine or other business machinery:
- Talk to your accountant and make sure your business is eligible.
- Purchase the machinery and put it “in service” the year you want to write it off.
- Make sure to keep good records and save the invoice(s).
- Expense the purchase under Section 179 when you file your business taxes using form 4562.
Let’s take an example and pretend you are purchasing a Goodnature X-1 Mini for about $14k total including accessories.
|Price of Equipment||$14,000|
|Typical tax rate||37%|
|Money saved on juicer with Section 179||$5,180|
|Effective price of equipment||$8,820|
If you’re interested in purchasing a Goodnature commercial juicer and taking advantage of Section 179 for your juice bar this year, contact us today for a quote and shipping estimate.