Do you know about the Section 179 Deduction?
Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. It’s an incentive created by the U.S. government to encourage businesses to buy equipment and invest in themselves.
Essentially, this means that if you’ve purchased or will purchase or finance a Kemco system by December 31, 2016 your business qualifies for up to a $500,000 write off on equipment totaling $2,000,000 or less. The deduction begins to phase out dollar-for-dollar after $2,000,000 is spent by a given business, so this makes it a true small and medium-sized business deduction.
Bonus Depreciation is offered in 2016 at 50%. This is useful to very large businesses spending more than the Section 179 Spending Cap ($2,000,000) on new capital equipment. Also, businesses with a net loss are still qualified to deduct some of the cost of new equipment and carry-forward the loss.
When applying these provisions, Section 179 is generally taken first, followed by Bonus Depreciation – unless the business had to taxable profit, because the unprofitable business is allowed to carry the loss forward future years.
Want to see what your savings would be on the equipment you purchased?
Visit the Section 179 website for more information.
BHJ USA in St. Joseph, MO is a processor of meat and meat byproducts for the pet food industry. They operate 24/7 and generate wastewater the entire day. The wastewater contains levels of fats, oils, greases, and total suspended solids in excess of the levels permitted to be discharged to the municipal sewer in St. Joseph. Therefore, in order to operate the plant, they needed a waste water treatment system to reduce these levels.
BHJ had many years of experience with Kemco Systems in another of their plants and decided to enter into discussions with them about their new plant. Together they evaluated BHJ’s needs and the decision was made to utilize a DAF (Dissolved Air Flotation System) as the main treatment process. The DAF is supplemented by a rotary screen to remove large solids prior to the DAF. The action of the DAF is supplemented by coagulating and flocculating chemicals supplied by a local vendor. Kemco also supplied a 5.5 million btu/hr., On-Demand, 99.7% efficient water heater to meet the facility’s hot water needs. In conjunction with BHJ and BHJ’s mechanical contractor Kemco’s Engineering Department did all the piping, electrical, and mechanical design for the heater and waste water treatment equipment.