Finance News & Insights

IRS offers new guidance on Section 179 deduction

If your company plans to make some major purchases or improvements this year, you’ll want to get your hands on this new IRS guidance. The Taxman just offered clarification on how you can take maximum advantage of the deductions.

IRS Revenue Procedure 2019-08 outlines procedures in light of the changes made by the Tax Cuts and Jobs Act (TCJA) which went into effect a little more than a year ago.

Remember, under the TCJA, Section 179 expense deductions your company can claim doubled to $1 million. And the phase-out limit increased from $2 million to $2.5 million.

A few months back IRS issued proposed regulations on how to take advantage of the changes.

But are you sure you know everything that qualifies? IRS’ new guidance offers some specifics that just might have you saving even more money.

Check out what Revenue Procedure 2019-08 has to say to see where your company might capitalize.

More eligible than you might think

Most businesses tend to think of machinery and equipment when they consider what counts toward Section 179.

But the latest tax law overhaul expanded what’s eligible. IRS reminds that the TCJA amended the definition of qualified real property to mean qualified improvement property and some improvements to nonresidential real property. That includes:

  • roofs
  • heating, ventilation and air-conditioning property
  • fire protection and alarm systems, and
  • security systems.

Now’s a great time to take another look at your company’s spending plans for 2019, especially in your facilities department.

If any of these areas were slated for some upgrades, improvements or replacements, you’ll want to flag them so you’re sure your company takes advantage of the tax depreciation for the year it’s placed into service.

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IRS released new guidance to help companies take maximum advantage of the expanded Section 179 deduction.

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