Carport Central has been working to keep you in the loop on special tax savings available to farm owners thanks to Section 179 deductions for several years. And thankfully, those deductions still apply for the 2023 tax year, as well! This particular section of the tax code was written to help small businesses save on their taxes by choosing to invest in themselves by purchasing qualifying property or equipment. What does this mean for you in the 2023 tax year? Essentially, you can deduct up to $1,160,000 on your purchase, and you’re also eligible to take a bonus depreciation amount of up to 80% of your purchase amount!
Thanks to the provisions of the Tax Cuts and Jobs Act, Section 179 allows businesses to deduct the full purchase price of qualifying equipment or property acquired during this current tax year. This means that if you purchase a qualifying item by December 31, 2023, you can deduct the FULL PURCHASE PRICE from your gross business income, and you can also take off a bonus first-year depreciation amount on top of your initial purchase price.
Normally, purchases that are categorized as capital expenses can only be written off a little at a time through annual depreciation. While that’s certainly better than no write-off at all, most business owners would benefit from being able to deduct the ENTIRE equipment purchase in the same year they make the purchase. Section 179 allows for just that, on any qualifying purchase! This is a potentially HUGE tax break that it would be wise for small farm businesses to capitalize upon.
Of course, we would be remiss if we didn’t point out that there are limits to which types of purchases will qualify for this special business tax deduction. To count towards the Section 179 deduction, the item must be eligible, intended primarily for business use, and acquired by purchase in 2023. Section 179 applies to certain tangible property and equipment, but doesn’t include all real property like buildings and associated structural components.
While many buildings and structures won’t qualify for this special business tax break, there are categories of commercial steel buildings intended for farm and agricultural business use that DO qualify! The current Farmer’s Tax Guide (IRS Publication 225) reveals that eligible single-purpose agricultural (livestock) or horticultural structures will meet the requirements for a Section 179 deduction!
So, what are those eligibility requirements? In order to qualify, a new agricultural structure must either serve designated livestock or horticultural purposes. A qualifying single-purpose livestock structure must be designed, constructed, and used for housing, raising, and/or feeding a particular type of livestock or poultry. A qualifying single-purpose horticultural structure can either be classified as a commercial facility for plant production, or as a commercial facility for dedicated mushroom production.
As long as your new structure is intended for one of these dedicated purposes, it qualifies for the tax break! But you need to act soon. These special Section 179 tax deductions only apply to the 2023 tax year, and there’s no guarantee that they’ll carry over to 2024. To ensure that your building qualifies for the current Section 179 deduction, you must purchase your structure and place it into service by December 31, 2023.
Carport Central can help you with the custom design, fabrication, and installation of a steel facility that’s perfect for meeting these Section 179-qualifying single-purpose livestock or horticultural functions:
Our friendly and knowledgeable building specialists are standing by to help you get the perfect custom steel building to meet your needs. We can help you take full advantage of this 2023 Section 179 business tax break right now! We’re also ready to provide you with any other residential, commercial, or farm metal structure needs you may have. Just give us a call at (980) 321-9898 today, and let’s get started together!
At Carport Central, We’re All About Providing Shelter for Your Way of Life. What’s Central to You, Is Central to Us.