What is Section 179 Expense?
Section 179 Expense is a common IRS-approved method to recognize full depreciation of fixed assets in the year of purchase. There is a limit on the amount of equipment that qualifies for Section 179 in a given year (up to 1,050,000 in 2021). It is advisable to mention how Section 179 expense differs from straight-line depreciation.
"Section 179 Expense was instituted by the United States government to encourage companies to buy equipment and invigorate the economy. Section 179 allows a company to deduct the full purchase price of equipment in the year of purchase, as opposed to depreciating over the useful life of the asset as required by financial accounting standards. Section 179 is a nice option for companies that invest in themselves to reduce taxable income."
