Section 179 Tax Deduction for Packaging Equipment [2023]

Packaging equipment can be an expensive investment, but under Section 179, you can get tax savings for your business by investing in it. Along with the fact that most packaging equipment offers a positive ROI in a year, this is a huge incentive for those considering new packaging equipment to act now.

Tax codes can often be complicated, but this one is pretty straightforward. To break it down, this section allows businesses to deduct purchase prices of equipment during the tax year. If you purchase or finance equipment this year, you can deduct the full purchase price from your gross income. Section 179 encourages businesses to invest in their growth with larger purchases such as packaging equipment.

How to Qualify for the Tax Break

• There’s an annual deduction limit. For 2023, this limit is $1,160,000.
• The deduction reduces after spending $2,890,000. If you spend over this, your deduction will be reduced on a dollar-for-dollar basis.
• Your business has to be profitable to use the deduction and is limited to the business’s taxable income.
• It’s important to remember that this is not an automatic deduction; you need to select it.
• The equipment that you purchase can be new or used, but it cannot be leased.
• The equipment purchased has to be put in service the year you buy it.

Whether you are buying equipment for the first time or upgrading to new equipment, you can ease the purchase cost burden with tax write-off incentives this year. (Not sure if you should buy new or repair your current packaging equipment? Take our Repair or Replace Equipment Assessment.)

For more information, visit section179.org. You should also check with your finance team or accountant to discover more ways to take full advantage of this deduction on your purchases before December 31st.

Our equipment specialists are ready to help you find the best packaging equipment to help you bring more productivity and efficiency to your operations. Contact us for assistance.