We specialize in bookkeeping, payroll, income tax return preparation, and retirement planning, and serve a nationwide clientele consisting of individuals and businesses of all types and sizes (LLC, partnerships, C & S Corporations), as well as trusts and estates. As financial problem solvers, we provide practical advice and proactive solutions with personalized service. We are affordable, experienced, and friendly, and we tirelessly study and research the ever-changing world of tax law and regulation so that we can help every client realize the greatest possible savings and return on investments. Our office is conveniently located in Dover, Delaware. Please contact us today to find out more about how we can make YOUR life less taxing!Tax
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๐ฆ๐ต๐ผ๐๐น๐ฑ ๐ ๐๐๐ฒ ๐ฆ๐ฒ๐ฐ๐๐ถ๐ผ๐ป ๐ญ๐ณ๐ต ๐ผ๐ฟ ๐๐ผ๐ป๐๐ ๐๐ฒ๐ฝ๐ฟ๐ฒ๐ฐ๐ถ๐ฎ๐๐ถ๐ผ๐ป ๐ณ๐ผ๐ฟ ๐บ๐ ๐ฏ๐๐๐ถ๐ป๐ฒ๐๐ ๐ฒ๐พ๐๐ถ๐ฝ๐บ๐ฒ๐ป๐ ๐ฝ๐๐ฟ๐ฐ๐ต๐ฎ๐๐ฒ๐?
One strategy is to apply Section 179 first to erase your active business income down to zero. Then, apply 100% Bonus Depreciation to any remaining asset basis if you want to strategically generate a tax loss.
Here is why: you can't use Section 179 to create a tax loss because it is strictly limited to your net business taxable income. On the flip side, 100% Bonus Depreciation doesn't care about your net income.
For example, if your net income is $100,000 and you buy a $150,000 machine:
โข ๐๐ช๐ต๐ฉ ๐๐ฆ๐ค๐ต๐ช๐ฐ๐ฏ 179: You can only deduct $100,000 this year. The remaining $50,000 carries forward to next year.
โข ๐๐ช๐ต๐ฉ ๐๐ฐ๐ฏ๐ถ๐ด ๐๐ฆ๐ฑ๐ณ๐ฆ๐ค๐ช๐ข๐ต๐ช๐ฐ๐ฏ: The purchase pushes your business into a $50,000 Net Operating Loss, which can potentially offset other income.
This distinction gives you more control over your tax outcome. You can decide whether it makes more sense to wipe out your current business tax bill or intentionally create a loss to offset other income.
When you look at your financial goals for this year, is your priority clearing out your active business income, or are you looking for ways to offset other income sources?
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๐๐ฎ๐ป ๐ ๐ด๐ฒ๐ ๐ฎ ๐๐ฎ๐
๐๐ฟ๐ถ๐๐ฒ-๐ผ๐ณ๐ณ ๐ถ๐ณ ๐ ๐ฏ๐๐ ๐๐๐ฒ๐ฑ ๐ฒ๐พ๐๐ถ๐ฝ๐บ๐ฒ๐ป๐ ๐ณ๐ผ๐ฟ ๐บ๐ ๐ฏ๐๐๐ถ๐ป๐ฒ๐๐?
Yes, both Section 179 and the permanently restored 100% Bonus Depreciation rules apply to new and used equipment. If the asset is new to your business, you can deduct up to 100% of the purchase price in 2026.
For example, a three-year-old commercial oven bought from a closed restaurant is considered new to your business. It qualifies for a 100% immediate write-off this year.
But you can't claim the write-off if the equipment is acquired through:
โข Gifts or inheritance
โข Purchases from an immediate family member
โข Shifts between business entities or LLCs you already own
So yes, buying used equipment can still come with a valuable tax benefit. You just need to make sure the purchase qualifies.
When you add equipment to your business, do you prefer buying brand new or finding good used deals?
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First State CPAs & Associates |
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18 S. State St, Dover, DE 19901 |
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| (302) 736-6657 | |
| Business Hours | |
| January 1st January 31st | |
| MondayโFriday: | 8amโ5pm |
| Saturday & Sunday: | closed |
| February 1st April 15th | |
| MondayโThursday: | 8amโ6pm |
| Friday: | 8amโ5pm |
| Saturday: | By appointment |
| Sunday: | closed |
| April 16th December 31st | |
| MondayโThursday: | 8amโ5pm |
| Friday, Saturday & Sunday: | closed |