How to Buy a Bus with Section 179
First things first: This material has been prepared for informational purposes only. This message from Davey Coach Sales and its affiliates is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult and rely on your own tax, legal and accounting advisers before engaging in any transaction.
At the beginning of the 4th quarter, businesses ramp up the advertising for that magic year-end event. You’re thinking Christmas? Yes, I suppose you’re right. But also: Section 179.
“What is Section 179”, you ask? Stated simply, Section 179 of the Internal Revenue Code allows a business to deduct the full purchase price of qualifying equipment (in our case, a bus) purchased or financed during the tax year. This incentive, created by the Federal government, encourages businesses to buy equipment and spur capital investment in the country.
There is specific language used for vehicles used in your business. “Work vehicles” can possibly be used for both personal and business purposes, but for the purposes of this message, we’ll be talking about passenger buses and vans, which usually qualify for full Section 179 deduction (again, we cannot stress enough that you should talk with your tax professional before assuming any purchase will qualify for the deduction).
How Does Section 179 Benefit You?
In the past, when you made a purchase of equipment used in your business, you expensed a portion of the investment over time through depreciation. As a working example, if you made a purchase of $100,000, in the past you would have written off $20,000 per year assuming a five-year useful life. Most businesses would instead prefer to write off the entire amount spent in the year it was purchased, and that’s exactly what Section 179 does – it allows your business to write off the entire purchase price of qualifying equipment for the current tax year.
This option has made a big difference for many companies in deferring taxes. Businesses have used Section 179 to purchase needed equipment right now, instead of waiting. For most small businesses, the entire cost of qualifying equipment can be written-off on the 2019 tax return (up to $1,000,000).
How Can You Take Advantage of Section 179?
The equipment has to be “new to you”, which means it can be new or pre-owned. You can pay cash, or have it financed. You must take delivery of your vehicle on or before December 31st. This means if you think you want to take advantage of Section 179 by purchasing a bus, you should begin shopping now. Finding the bus that meets your needs and your budget should start with a discussion with a Davey Coach sales consultant.
Don’t wait until there are only a few days left to make your purchase. Browse our inventory and let us know how we can help you find the bus that meets your needs!