Section 179 GPS Deductions
I think you already know the saying “in this world, nothing can be certain besides death and taxes”. Things are changing and today people talk of a relationship between taxes and GPS for fleet. I bet you are already asking which relationship is there between taxes and GPS tracking for fleet companies. First thing first, both GPS for fleet and the Taxes relate to a company management. The ultimate goal of a company is to maximize tax benefits while reducing tax costs. A good example of a relationship between tax profits and GPS fleet tracking is Section 179 in the US.
What is Section 179?
Section 179 is a tax opportunity for GPS tracking programs where you can write-off the cost of your equipment and save over 35% of the money used in purchase of GPS equipment and software. The IRS allows for an asset wear and tear and for this reason, company owners are supposed to deduct a percentage of assets as a tax credit.
Section 179 allows businesses to deduct the full purchase price of any qualifying equipment or software during the tax year. Even if you are leasing equipment, you are allowed to deduct the full purchase price from the company’s gross income. The main reason for this is to encourage businesses to buy equipment and invest on themselves.
Section 179 was initially known as the SUV Tax Loophole or even the Hummer deduction. Many businesses have used this tax provision to write-off the buying of qualifying vehicles. However, in recent years, this particular benefit has been reduced.
Under section 179, businesses can elect to deduct $2.5 million of equipment purchase this year and now fleet companies can include other programs including investing in Car tracking systems. Section 179 is now very profitable to small businesses than ever. It is now one of the most profitable incentives for the US government to support small businesses growth.
However, this doesn’t mean that large businesses and multinational companies don’t benefit from this provision. They do, though the main target of the government was the small businesses. As a matter of fact, millions of small businesses in the USA are taking action and benefiting in real since.
How Does Section 179 Work?
If we take a look at what happened previously, you will get a better picture of how section 179 works. When you wanted to purchase qualifying equipment, you typically wrote off a little at a time for the coming years. What this means is that after buying an equipment worth $A, that specific machine gets write-off (say) Amount $B each year for 5 years.
Today, as many businesses would like, you can write off the equipment’s purchase price for the year they buy it. With section 179, you can write off the entire purchase price of qualifying equipment for the year you buy it. What this means for the businesses is that they can just purchase the equipment they wanted now without having to be forced to wait. This year, for small businesses, the entire cost of qualifying equipment can be written-off up to $1,000,000.
Upper and Lower Limits of Section 179
As you could expect, there are limits for section 179. There are limits to the total amount written-off which is $1,000,000 for 2018. The other thing is that there’s limit to the total amount of equipment that can be purchased which is $2,500,000 for this year too. If you observe all the limits for section 179, you are likely to detect that it is a small and medium sized business deduction. Almost every business that finance, lease and/or purchase new or used equipment automatically qualify for these deductions.
What Qualifies for Section 179
If you ask financial experts, they will tell you that section 179 was brought forward to scale your business. This is the reason why almost all the equipment and software that your business uses qualifies for section 179. It is common knowledge that all businesses need equipment for vehicles, GPS tracking, computers and containers to keep running. What this means is that your upcoming or mid-size business will buy these equipment several times a year and for this reason, there’s need to save on this. This is the main reason why the government is entitled to help you scale your business by saving on equipment and software.
Most of the equipment can qualify but bear in mind that they only qualify if they were purchased and put in use before the end of 2018. You had all the yearlong to do this but now there are few weeks remaining for you to leap this benefit. The list of that equipment qualifying includes:
- Business vehicles for those vehicles with a gross weight in excess of 6,000lbs.
- All types of computers both for tracking and for the company’s operations.
- Office furniture
- Containers
- Tangible personal property but which is used in the business.
- Office equipment
- Other properties that are attached to your building but are not part of the structural building materials. Some of them includes manufacturing tools and press.
- Equipment purchased for business and for personal use at the office.
- Improvement equipment to existing non-residential building. This includes fire alarms, HVAC and roofing systems and the security system.
Section 179 GPS Deductions
We both know that GPS tracking systems are beneficial to all aspects of fleet management. If you are still hesitating about installing GPS car tracking systems for your business, then you have to harry. For the best deals and offers on GPS car tracking devices, get in touch with GPS car tracking service provider GPS leaders.
The IRS is now giving you another chance in 2018 financial year to get GPS tracking systems and other equipment. As we have already seen, the IRS has boosted the equipment tax deductions for this year from $510,000 in 2017 to $1,000,000 this year. What this means for you is that they are really begging you to pull the trigger. If your fleet company hasn’t yet used that amount of money on equipment such as GPS tracking equipment, furniture, cars and software, then you still have to do something before the end of the year.
100 % write off on GPS tracking equipment can drop the cost of that software and equipment by about 35% or even more in some other instances. The government is entitled to reduce the cost of all your business equipment for an entire year to give you a better chance of buying new equipment and even investing in your business.
It is possible that you can write off the entire GPS tracking system purchase the remaining days of the year. By December 31st 2018 which is fast approaching, even if you purchase or lease a GPS tracking system for your vehicles, you are given a chance to write off the entire amount of the equipment and the software. What you can write-off include:
- GPS tracking equipment for containers, trailers and several other mobile assets
- GPS trackers for vehicles both personal and commercial.
- GPS Trackers for heavy equipment including all your construction equipment.
- Lastly your telematic tracking software.
If you are not fast enough you are likely to lose all these benefits of Section 179. If you wait until past 31st December 2018, then you will not have the 100% write off benefit for your GPS tracking system. Past this, you will not have any excuse for not taking advantage of this deduction the entire year.
When Is The Best Time To Act?
The best time to act is now. The fact is that each year, section 179 can change without notice. I bet you already know that section 179 has even changed midyear. You will only get the advantages while section 179 is still at work. There’s no doubt that it offers small businesses an opportunity to save a lot on investments. It gives them a great opportunity to maximize on purchasing power. Don’t take time to think too much about it. It will only benefit you if you take chances now.
There are several advantages of getting GPS tracking devices in your fleet. The fact is that a large amount of your investment is on the road and if you don’t take due care, they can be damaged or stolen and loses will accrue.
The Bottom Line
Now is essentially the best time to invest in a valuable GPS tracking system for your fleet business because the US government will pay for the larger portion of your investment. It is now possible to save up to 35% in equipment purchase. Take advantage of section 179 now and get the most out of it. I don’t see any other time to invest on a reliable GPS tracking system for your business.
If you have decided to buy GPS tracking services for your business, then you should first of all take time to research for the best B2B GPS tracking services. If you are in California and wants to get the greatest offers and deals on GPS tracking systems, then get in touch with the B2B GPS tracking provider GPS Leaders.
