Understanding your company’s tax liability and strategy is important to running a successful business. Tax codes like the Section 179 rule allow semi truck drivers, construction businesses and other entities to use their semi trailer tax deductions to avoid some tax liability from the federal government. Learn how this simple tax rule can help alleviate some of the burden from Uncle Sam.
Section 179 Semi Trailer 2020 Rules
The government has updated rules to the Section 179 regulation of the IRS. There is an organization dedicated to informing businesses about the newest updates to Section 179. Find the website and deduction calculator here. The latest guidance came October 20, when there was a COVID-19 related update. Here are some of those updates:
- Oct. 20, 2020 – Most equipment purchased by businesses to conform to COVID-19 restrictions will qualify for the deduction. Other deductions in the rule will not be affected by pandemic related assistance a business has received, including PPP loans.
- Jan. 16, 2020 – The Section 179 2020 deduction limit under the rule is $1 million. The total equipment purchase limit is $2.5 million. Both new and used qualified equipment will be included in deductions. Get 100 percent bonus depreciation on equipment for all of 2020.
- IRS has issued a fact sheet FS-2018-9, which includes information on deductions such as building improvements, bonus depreciation changes and depreciation limits on business vehicles, recovery period for property and new treatment of farm equipment. The 2018 information still applies to 2020, according to documentation in New Rules and Limitations for Depreciation and Expensing under the Tax Cuts and Jobs Act.
Financing and Leasing Semi Trailers
The tax year 2020 could be a profitable one for your business if you take advantage of the government’s Section 179 equipment purchase rules including financing and leasing semi trailers. Think about this. The taxes you save using the deduction almost always exceeds cash outlay for the year when you combine the following factors, according to Section179.org:
- a properly structured Equipment Lease or Equipment Finance Agreement that contains a full deduction
- a full Section 179 deduction. Use it to add new equipment, vehicles, and/or software to your business, including semi trailers for sale
Semi Trailer Sale, Year End Tax Sell-Off
Find a full supply of construction trailers, livestock trailers, end and side dumps, live bottoms, flatbeds, drop decks, lowboys, vans, reefers and grain hoppers. Contact Star Trailer Sales today or browse our inventory online of new and used semi trailers for sale before the end of December to take advantage of Section 179 tax bottom line enhancement.