IRS Section 179 | Waste Oil Heater Tax Deduction

Small Business Incentive

⭐️ The Section 179 Tax Deduction is an important government incentive available to small businesses.

⭐️ This IRS tax code allows business taxpayers to deduct qualifying equipment purchased for use in a trade or business.

⭐️ Qualifying equipment includes waste oil heaters and waste oil boilers.

⭐️ For most small businesses, the entire cost of the qualifying equipment (up to $1,050,000) can be written off the 2021 tax return (up to $1,040,000 for 2020).

What is the Section 179 Deduction?

The Section 179 Tax Deduction is an important government incentive available to small businesses.

Essentially, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year.

That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. It’s an incentive created by the U.S. government to encourage businesses to buy equipment and invest in themselves.

How Section 179 Works:

When your business buys certain items of equipment (like a waste oil heater), it typically gets to write them off a little at a time through depreciation. In other words, if your company spends $50,000 on a machine, it gets to write off (say) $10,000 a year for five years. (Note: These numbers are only meant to give you an example).

Now, while it’s true that this is better than no write-off at all, most business owners would really prefer to write off the entire equipment purchase price for the year they buy it. In fact, if a business could write off the entire amount, they might add more equipment this year instead of waiting over the next few years.

That’s the whole purpose behind Section 179 – to motivate the American economy (and your business) to move in a positive direction.

For most small businesses, the entire cost of the qualifying equipment (up to $1,050,000) can be written off the 2021 tax return (up to $1,040,000 for the 2020 return). To take the deduction for the 2021 tax year, the equipment must be financed or purchased and put into service between January 1, 2021, and the end of the day on December 31, 2021. (For the 2020 tax year, the equipment must have been financed or purchased and put into service between January 1, 2020, and the end of the day on December 31, 2020.)