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Businesses are always looking for ways to improve the bottom line, increase productivity, and establish more efficient practices. With the year-end fast approaching, it’s an ideal time to consider one strategy that can provide significant financial relief: the Section 179 tax deduction.
This provision allows companies to write off the full cost of qualifying capital expenditures (CapEx), like equipment purchases, up to $1.22 million in 2024. Here’s how it works and why it’s beneficial for both labs and production facilities.
What is Section 179?
Section 179 is part of the tax code designed to help businesses by allowing them to deduct the full purchase price of qualifying equipment within the same tax year. For 2024, the maximum deduction has been set at $1.22 million. This means if you purchase or finance eligible equipment—such as solvent recyclers or recovery systems—and have it in service by December 31, you can fully deduct its cost for the 2024 tax year. But time is running out, so it’s important to get started as soon as possible. The first step is educating yourself about the potential benefits.
Benefits of Accelerated Depreciation
The primary appeal of Section 179 is that it provides accelerated depreciation. Instead of spreading out the depreciation of a capital purchase over several years, Section 179 enables you to claim the entire cost upfront, essentially turning a capital expenditure into an expense. This is a powerful tool for businesses seeking to maximize cash flow and reduce taxable income. For example, a $20,000 equipment purchase can lead to a tax savings of $4,200 at a 21% tax rate, making the net cost just $15,800.
Year-End Deductibility of CapEx
To qualify for the 2024 tax deduction, equipment must be purchased and operational by December 31. This year-end deductibility makes Section 179 an attractive option for companies planning to invest in new or used equipment soon. For labs and production facilities, equipment like solvent recycling systems offer not only operational benefits—like reducing solvent costs and improving workflow efficiency—but also the opportunity to capture significant tax savings.
Why Labs and Production Facilities Should Take Advantage
Solvent recycling and recovery systems, such as CBG’s PathTrue™ for laboratories and SolvTrue™ for manufacturing facilities and production environments, not only promote sustainable practices but also offer strong economic benefits by reducing solvent purchases and disposal costs by more than 90% each year. Section 179 allows you to deduct these environmentally friendly investments in the same year they’re purchased, helping to offset costs while making your facility more efficient.
Time is Limited: Act Now to Cash in on Savings
With Section 179, businesses can make necessary upgrades and realize substantial savings by deducting the cost of new equipment immediately. If you’re planning an equipment purchase, whether for a lab or production setting, now is the time to take action before the December 31 deadline. Contact CBG Biotech to learn more about equipment availability and start your journey to a more efficient and financially beneficial operation.
Check out these other helpful resources:
- Blog Post: How Solvent Recycling and Recovery Saves Time and Improves Workflow
Evolving Challenges in Modern Laboratories - Blog Post: Streamline Production Workflows and Save Time with Solvent Recycling
Navigating Today’s Challenges in Production Facilities - Blog Post: 5 Ways to Improve Operational Efficiency in Manufacturing Facilities
Solvent recycling with an industrial distillation unit offers major benefits to boost operational efficiency.
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