Laws & Legislation


10 29 2013

10 29 2013

What Are The Business Benefits Of Section 179 Tax Code?

In the past few years, most small business owners have probably heard the term “Section 179” from peers, clients or partners. Some may have even explored the tax benefit option, but many others are likely unfamiliar or confused how the deduction works. Unfortunately, if small business owners do not learn about it soon, they could miss out on saving hundreds of thousands of dollars. In 2014, Section 179 tax benefits will be drastically reduced if no other governmental action is taken. Luckily, the details are relatively straightforward. By reading on, small business owners should be able to determine what they have to do to benefit.

In a nutshell, Section 179 of the tax code allows deductions of up to $500,000 for new and used equipment purchases.

Businesses have traditionally been able to write off small amounts of equipment purchases each year due to price depreciation, according to the IRS. However, recent changes to the code have allowed businesses to write off the entire cost the year it was purchased. Rather than wait many years for depreciation to build, the measure gives owners immediate access to their working capital, which they can then use to reinvest in their businesses.

Benefits are not limited to purchasing, but equipment financing as well.

A recovery initiative

Back in 2007, Section 179 offered deductions of up to $125,000 on qualifying equipment under $500,000. The benefit, while sizable, was scheduled to decrease in coming years. The following year, however, the economy took a turn for the worst, prompting Congress to pass the Economic Stimulus Act of 2008. Among its many provisions was legislation that increased the max deductions of Section 179 to $250,000 and the max purchase amount to $800,000. Furthermore, purchases made above the limit became eligible for a deduction totaling 50 percent of the cost.

Since 2008, annual legislation has extended these benefits. In 2010 deductible amounts grew even higher. The deduction limit increased to $500,000 and the maximum purchase amount increased to $2,000,000. The amounts have remained in place since, but are scheduled to end on Jan. 1, 2014, meaning businesses will have to move quickly to finance equipment in the tax year.

What is covered?

There are specifications as to what equipment can and cannot be deducted. One requirement is that equipment must be used for business more than 50 percent of the time. The amount of time it is used leisurely needs to be subtracted from the benefit. For example, if somebody uses the company truck recreationally on weekends than about 20 percent of its total use would be for non-business purposes. Under Section 179, only 80 percent of the truck cost is eligible for deduction.

If you’re a small business owner who is interested in writing off a purchase, be sure to investigate if your desired equipment will be covered. Owners who want to take advantage of the clause, but are unable to afford an upfront purchase, have the option to lease their equipment. National Funding will finance new or used equipment in almost every industry, helping businesses of all budget sizes take advantage of the tax benefit.


Find Out How Much Funding You Qualify For

Fields marked with an * are required
By clicking this button I agree to all terms and conditions.

Terms & Conditions

General Acceptance

Any applications submitted electronically shall have the same force and effect as if the application bore an inked original signature(s). The above information, together with any accompanying financial statements, schedules, or other materials, is submitted for the purpose of obtaining credit and is warranted to be true, correct, and complete.


US Patriot Act:

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person and business that seeks a business loan. What this means for you: When you apply for a loan, we will ask for your business name, address, and Tax Identification Number. We will also ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.


For Loan/Merchant Services:

The Merchant and Owner(s)/Officer(s) identified in the application (individually, an “Applicant”) each represents, acknowledges and agrees that (1) all information and documents provided to National Funding, Inc. (“NF”) including credit card processor statements are true, accurate and complete, (2) Applicant will immediately notify NF of any change in such information or financial condition, (3) Applicant authorizes NF to disclose all information and documents that NF may obtain including credit reports to other persons or entities (collectively, “Assignees”) that may be involved with or acquire commercial loans having daily repayment features and/or Merchant Cash Advance transactions, including without limitation the application therefor (collectively, “Transactions”) and each Assignee is authorized to use such information and documents, and share such information and documents with other Assignees, in connection with potential Transactions, (4) each Assignee will rely upon the accuracy and completeness of such information and documents, (5) NF, Assignees, and each of their representatives, successors, assigns and designees (collectively, “Recipients”) are authorized to request and receive any investigative reports, credit reports, statements from creditors or financial institutions, verification of information, or any other information that a Recipient deems necessary, (6) Applicant waives and releases any claims against Recipients and any information-providers arising from any act or omission relating to the requesting, receiving or release of information, and (7) each Owner/Officer represents that he or she is authorized to sign this form on behalf of Merchant.(8) I consent to receive direct mail, faxes, text-messages, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (9) this request is for business and not for consumer purposes.


For Equipment Services:

I hereby certify: (1) the information provided is true and correct, (2) you are hereby authorized to investigate all bank, credit, and trade references, and said references are hereby authorized to release any requested information to you or your nominee, (3) such authorization shall extend to obtaining personal credit profile in considering this application and subsequently for the purposes of update, renewal or extension of such credit or additional credit and for reviewing or collecting the resulting account, (4) this information may be transmitted by us to you and by you to underwriter(s) for the purpose of granting me credit, either electronically or manually, and that by submitting this application, I take full responsibility for transmission thereof, (5) I am over 18 years of age, (6) I acknowledge my rights under the Fair Credit Reporting Act, (7) I consent to receive direct mail, faxes, text-messages, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (8) this request is for business and not for consumer purposes.


Text Messaging:

By providing my wireless phone number to National Funding, Inc., I agree and acknowledge that National Funding, Inc. may send text and multimedia messages to my wireless phone number for any purpose. I agree that these text or multimedia messages may be regarding the products and/or services that I have previously purchased and products and/or services that National Funding, Inc. may market to me. I acknowledge that this consent may be removed at my request but that until such consent is revoked, I may receive text or multimedia messages from National Funding, Inc to my wireless phone number.

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status or age (provided the applicant has the capacity to enter into the binding contract); because all or part of the applicant’s income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. If for any reason your application for business credit is denied, you have the right to a written statement of the specific reasons for the denial. To obtain the statement, please write to National Funding Inc., 9820 Towne Centre Drive, San Diego, California 92121. Funding amount and credit approval is subject to a full credit profile review.