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 2021 Rules
Here are some details about Section 179 regulation of the IRS. The organization dedicated to informing businesses about Section 179 has been discussed in previous posts on Star Trailer Sales. Find the website and deduction calculator here. The latest guidance came May 20, when there was a supply chain related update. Here are some of those updates:
- Supply Chain Issues and the Section 179 Deadline for 2021 listed at section179org
- To be eligible for a 2021 Section 179 deduction, equipment such as semi trailers must be purchased and put into service by midnight on December 31, 2021. Simply buy the equipment is not enough.
- Keep these supply chain issues and delivery times in mind when buying or using Section 179 Qualified Financing
- There are no plans to waive the requirement for putting trailers into service
- Most purchases required for COVID restrictions are covered
- Section 179 tax deduction eligibility for 2020 is not impacted by pandemic-related financial assistance to a business. So, if a business got PPP loan funds or assistance related to COVID, they can still get the deduction
- The 2021 Section 179 deduction limit for businesses is $1,050,000
- U.S. businesses can deduct the full price of qualified equipment purchases, up to $1,050,000, with a “total equipment purchase” limit of $2.62 million.
- The deduction number is slightly up from $2.59 million in 2020
- It includes both new and used equipment
- Take advantage of 100 percent bonus depreciation new/used equipment
- IRS Fact Sheet issued for Section 179 FS-2018-9 includes the addition of certain kinds of structural improvements, changes to depreciation limitations on vehicles used for business, new considerations for farm equipment and recovery period for real property.
Financing and Leasing Semi Trailers
The tax year 2021 could be a another profitable one for your business if you take advantage of Section 179. This allows your business to deduct certain equipment purchases. The policy reflects rules including financing and leasing semi trailers. Save money on taxes using the deduction. It will almost always exceed 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.