The 2018 Tax Cuts and Jobs Act (TCJA) brought about many changes that have set the pace for 2019. There are important manufacturing tax questions we are asking ourselves or should be. Shop Floor Automations has some tips you should check out!
What kind of benefits can manufacturers seek out? Section 179 is a big resource for our industry we should all be utilizing. Especially if there are upgrades crucial to your productivity you want to write off.
“If you purchase or lease qualifying equipment, like CAD CAM software, you can fully deduct the total purchase price from your gross income,” a representative at BobCAD CAM says. “The price limit is set at $500k, but businesses that exceed that limit can take a one-time, bonus depreciation of 50 percent the amount that exceeds the limit.”
Another benefit that has been significant for manufacturers has touched on equipment depreciation. When pursuing equipment financing via loans, nontax leases or tax leases, owners have been able to deduct depreciation expenses. The TCJA will still allow this to be done.
“The centerpiece of the TJCA – a reduction in the maximum corporate tax rate from 35 to 21 percent – drastically reduces tax liability for many manufacturers,” says Toni Larson, who wrote a piece on Tax Reform in January’s issue of MetalForming Magazine.
Other benefits Larson suggests looking into for 2019:
- 100 percent expensing for equipment placed in service after 9/27/17 and before 1/1/23
- Investment Tax Credit (ITC) as well as the aforementioned Section 179
- Find an expert in equipment leasing who can provide specific knowledge based on your equipment needs and business goals
Get in touch with us about investments you can make for your 2019 manufacturing operation! Call (877) 611-5825 or fill out a contact form