Benefits of Equipment Purchases

The IRS and taxes in general can sometimes be daunting. However, the IRS offers tax codes that could help contractors like you save money with financing options. 

An “EFA” is an equipment finance agreement, which means the customer owns the equipment upfront and pays the lender monthly, annually, or on any kind of schedule, much like financing a car. Section 179 generally allows businesses to deduct the full purchase price of qualifying equipment and software for the current tax year. You may be able to combine an EFA from your lender with the advantages of Section 179. Your deduction may be larger than your loan amount for the year, saving you even more money. This article is intended to provide an overview of Section 179 and should not be taken as tax advice; reach out to a tax professional with any questions you may have.

What’s Covered

Section 179 applies to tangible personal property, including machinery and equipment used for trade or business. Improvements to nonresidential real property may also qualify for the benefits of Section 179, such as roofs, HV- AC, fire alarms, and security systems. 

Applying Section 179 to Machinery and Equipment Purchases

To qualify, equipment must be purchased and put into use between January 1st and December 31st of the applicable tax year. Equipment must be purchased for business use, including business vehicles with a gross vehicle weight in excess of 6,000 pounds. Code 179 also includes equipment for partial business use, or equipment that is purchased for business use and personal use. Generally, deductions will be based on the percentage of time you use the equipment for business purposes. 

At SiteOne, products like our LESCO ride-on sprayers, spreaders, aerators, and seeders may be eligible for Section 179 tax deductions. Contact your tax professional to discuss your specific tax situation.

How to Apply

To elect the Section 179 deduction, reach out to your tax professional to discuss your specific tax situation.

Combine Section 179 with SiteOne Financing Offers

Financing your equipment could provide you with tax benefits under Section 179. You may be able to deduct the full price of your purchase, even if you haven’t paid the full amount yet. Section 179 may also apply to your business when leasing equipment (using a non-tax capital lease). 

For equipment financing options with SiteOne, visit this section of our website or speak with a local branch associate today.