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President Reagan was famous for turning a phrase. In 1986 he said that “The nine most terrifying words in the English language are I’m from the government and I’m here to help.” His line got applause and laughs and still gets quoted often today. Well, putting aside President Reagan’s dig at government inefficiency, there’s a government program that’s a well-kept secret…an IRS program…that can really help your business. It’s called Section 179 of IRS Tax Code. And you need to know the code because it can be a great tool for you in building your business. We’ll explain this a bit more shortly.

Everywhere you turn, the story is the same. Ships stuck at ports, supply chain chaos reigns, inflation is spiking. There are major headwinds affecting all countries, all businesses, all industries. If you’re a business owner, the constant stream of unsettling news is enough to make you just throw up your hands and accept fate. But you can’t do that.

Despite rising costs and equipment and materials shortages, you still have customers to serve. And the pace of change of technology demands that you stay in step or ahead of your competition to deliver value to your customers. You can’t duck for cover and hope it gets better. You need to invest in your business with equipment, machinery, materials, software. You need to generate sales and revenue now. And you need to do this smartly. So, what do you do?

For starters, there’s no denying the shortage of equipment, the competition for limited supplies and the steep up-turn in prices. But that’s where Section 179 of the Tax Code comes in. Section 179 may provide you with a significant financial benefit if you act now, purchase needed business supplies and take delivery before the end of calendar year 2021.

Section 179 is an expensing method offered as an incentive to business owners to invest in their business with the purchase of new equipment.  Typically, most companies will depreciate the cost of equipment or machinery or software over the course of a few years. But Section 179 allows you to fully-deduct the entire purchase price for property you place into service in 2021. You immediately lower your tax liability with equipment that helps you generate revenue now.

If you’re a small printing shop specializing in banners, signs and printing on a variety of materials in a variety of sizes, you may be interested in buying a new Digital Cutter at an approximate cost of $180,000. You could depreciate that equipment $36,000 per year over the course of 5 years, or you could take advantage of Section 179 and fully deduct the $180,000 cost on your 2021 tax return.

Tax codes can be tricky stuff but there’s some great information found on the Geneva Capital website that explains how businesses can benefit from Section 179. Of course, it’s always best to consult your tax advisor or accountant on all of these issues. But time is short on this calendar year, and equipment supply is even shorter.

Act fast, learn more and see if you can make Section 179 work to your advantage this year.