If you’re in the market for drone LiDAR equipment and advanced processing software to enhance your surveying capabilities, the 2023 Section 179 tax provision offers a unique opportunity. Section 179 allows for businesses to enjoy substantial deductions on qualifying equipment and software purchases, making it the ideal time to invest in the latest drone surveying technology. Before the year ends, now is an excellent opportunity to add drone surveying equipment and processing software from GeoCue and Microdrones and reduce your 2023 taxes.
Understanding Section 179 Deduction
The Section 179 Deduction allows businesses to deduct the full purchase price of qualifying equipment acquired or financed during the tax year. In 2023, the deduction limit has increased to a generous $1,160,000, up from $1,080,000 in 2022. This significant bump of $80,000 provides businesses with more room for deductions, allowing for substantial savings.
This deduction isn’t limited to new equipment; it also applies to used equipment and off-the-shelf software. Most businesses that purchase, finance, or lease new or used business equipment during tax year 2023 should qualify for the Deduction, provided their spending stays below $4,050,000. Qualifying equipment includes tangible goods used by American businesses and off-the-shelf software.
Spending Cap for Equipment Purchases
For added flexibility and benefits, the 2023 Section 179 Deduction comes with a spending cap of $4,050,000. This cap represents the maximum amount you can invest in equipment before the 179 Deduction starts to reduce on a dollar-for-dollar basis. This spending cap caters to small and medium-sized businesses.
Bonus Depreciation
One of the key distinctions between Section 179 and Bonus Depreciation is that both new and used equipment qualify for the Section 179 Deduction, while Bonus Depreciation traditionally applied to new equipment only. However, in 2023, used equipment is also eligible for bonus depreciation. Bonus Depreciation typically comes into play once the Section 179 Spending Cap is reached. This means that, even after you reach the spending cap, you can still maximize your deductions with bonus depreciation.
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