As the end of the year approaches, many business owners are looking for ways to maximize their tax savings. If your company is in the propane industry—or any business requiring vehicles and equipment—Section 179 of the IRS tax code could be your golden opportunity.
What Is Section 179?
Section 179 allows businesses to deduct the full purchase price of qualifying equipment and vehicles purchased or financed during the tax year. Rather than spreading deductions over several years through depreciation, Section 179 lets you take the full deduction in the year the equipment is placed in service.
For 2024, the Section 179 deduction limit is $1,160,000, with a spending cap of $4,050,000. Any equipment purchased must be used at least 50% for business purposes to qualify.
Why It Matters for Propane Businesses
Investing in propane bulk storage tanks or delivery trucks is essential for growth. Whether you’re expanding your service area, replacing aging equipment, or boosting efficiency, these investments can be costly. Section 179 can significantly reduce the net cost, freeing up capital for other needs.
For example, if you purchase a new propane bobtail truck for $250,000 and it qualifies for Section 179, you can deduct the entire $250,000 from your taxable income for 2024. Similarly, buying additional bulk storage tanks could increase your storage capacity while providing a valuable tax benefit.
Key Steps to Take
- Evaluate Your Needs: Assess your current equipment. If you’ve been delaying necessary purchases, now is the time to act.
- Confirm Eligibility: Ensure the equipment qualifies for Section 179 by consulting with your tax advisor. Items like propane tanks, trucks, and other related tools typically meet the requirements.
- Purchase Before Year-End: Equipment must be purchased and put into service by December 31, 2024, to qualify for this year’s deduction.
- Finance Smartly: Even if you don’t have cash on hand, financing options may allow you to benefit from Section 179 while spreading payments over time.
Don’t Miss Out
Failing to take advantage of Section 179 means leaving money on the table. For propane businesses looking to expand or improve operations, this tax deduction is a powerful incentive to invest in the future.
Consult Your Tax Professional
While this article provides general guidance, every business is unique. A tax professional can help you navigate the specifics of Section 179 to ensure compliance and maximize your savings.
Take action now, and make the most of Section 179 before the year ends!