The Tax Cuts and Jobs Act signed into law late last year includes key changes to how business equipment is depreciated. Now for the first time, new HVAC systems – including Range Ventilation Systems – are included in Section 179. This means they can be fully written off in the tax year they are paid for instead of being depreciated over 39 years as a capital improvement.
This change is a blessing for new range owners. Cash is king when you’re launching a new business, and Section 179 frees up precious cash just when owners need it the most. For example, a range builder investing $300,000 in a new system can now deduct just over $100,000 in year one, assuming a 35% tax bracket, instead of deducting only a few thousand dollars in the first year.
If you’re planning to build a new range … or retrofit an existing one, this change will provide some added flexibility. You now have a significant chuck of money to put to use in whatever way is most important … buying new furniture, stocking inventory, making a new hire, marketing your range, etc.
Just a friendly reminder, be sure to consult a tax expert for specific guidance unique to your situation.