Section 179 Expensing

Permanency for Small Business Tax Extender

For the past several years, the SBAC has been advocating for the expansion and permanency of Section 179 expensing. Congress voted to approve a spending plan and tax extender package, which among its many provisions, made permanent $500,000 Section 179 expensing limit. A huge thank you to everyone who answered our calls to action throughout the years, and joined us in Washington, D.C. to advocate for this important issue.

Section 179 allows a small business to deduct the costs of assets acquired for business use as expenses in the year they purchased the assets, instead of requiring them to be capitalized and depreciated. Allowing small businesses to deduct up to $500,000 a year for software, equipment and other qualifying assets encourages small business owners to make investments in their companies. This also helps small businesses because they have more cash on hand to operate, expand and hire.

Significantly, due to budgetary and political restraints, too many of these provisions were enacted on a temporary basis, requiring repeated extensions. The uncertainty resulting from this wait and hope pattern, made it difficult for small businesses to plan effectively for the future.

Passage of this legislation is a big win for small business owners. Permanently increasing expensing limits under Section 179 means more economic activity, more job creation, and a greater level of certainty for the small business community.