Now is a good a time as any to invest in commercial HVAC equipment—the recently passed Tax Cuts and Jobs Act gives businesses a great opportunity to invest in themselves without paying a hefty price. For several years leading up to this change, businesses could deduct next to nothing when it came to spending money on necessary equipment for project completion. The Section 179 Tax Cut states:
“A taxpayer may elect to treat the cost of any section 179 property as an expense which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction for the taxable year in which the section 179 property is placed in service. Qualified Real Property applicable includes heating, ventilation, and air-conditioning property.”
For purchases up to $2.5 million, equipment costs can be deducted as a business expense, leading to major tax breaks for building owners and tenants.
So, what should I do to take advantage of Section 179?
First and foremost: don’t waste time. The longer you wait, the less likely you are to enjoy the recent tax breaks. Consider purchasing high-efficiency HVAC systems and replacing aging units before it’s too late. With a deduction limit of up to $1 million, there’s no reason not take advantage of this excellent deal. Everyone could use a tax break—make sure that you’re running, not walking, to your nearest provider to see how you could be saving plenty of money on your next HVAC purchase.
How do I know if I qualify for Section 179?
If you’re a business that purchases, finances, or leases new or used equipment during the tax year 2018, then you’re good to go if you spend less than $3.5 million. If you purchase equipment before December 31st, 2018, then you’re in the clear.
How is this any different than years past?
Rather than gradually write off your tax deduction, you now get to write off 100 percent of it, right from the get-go. Sure, it wasn’t awful the old way—it sure beats no write-off at all. But being able to write off equipment purchases without fear of retribution (so as long as you play by the rules) allows for optimal budget planning for the 2018 tax year. Make sure you take advantage of this great offer before it’s too late.