Make the Most of Your Section 179 Tax Deduction (2023 Update)

The Answer Is Easy: Make the Most of Your Business Tax Deduction by Purchasing New Digital Menu Equipment Before the End of the Year. Owning, operating, or managing a business such as a quick-service restaurant (QSR), café, fast casual restaurant, or dining service is no easy feat and is something to be proud of. This year in 2023, the Tax Cuts and Jobs Act has made it a bit easier to own or operate such a business, at least as far as expenditures go, like equipment and hardware upgrades. By purchasing new equipment before the end of the year (December 31, 2023), like digital menu boards and accompanying hardware accessories, you’re not only investing in your business for increased revenue next year, you’re also making the most of your business tax deduction.

Under the new law, businesses can expense more. According to the Official website of Section 179:

“The Section 179 deduction for 2023 is $1,160,000 (this is up from $1,080,000 in 2022). This is a full $80,000 increase from last year. This means U.S. companies can deduct the full purchase price of ALL qualified equipment purchases, up to the limit of $1,160,000. In addition, the “total equipment purchase” limit has been raised to $2,890,000 (up from $2.7 million in 2022). The deduction can include both new and used qualified equipment.

In addition, businesses can take advantage of 80% bonus depreciation on both new and used equipment for the entirety of 2023. Remember to keep supply chain issues and delivery times in mind when making your Section 179 purchases for 2023, as equipment must be purchased and put into service by midnight 12/31”

Typically, capital expenditures (purchased assets whose usefulness or value to a company exceeds one year) are deducted over a number of years through a process of depreciation, amortization or depletion, rather than being deducted in the year the assets were purchased. 

As the end of 2023 is nearly upon us, we wanted to remind you (franchisees, franchisors, QSR owners and operators, and dining service managers) that now, before January 1, 2024, might be a good time to purchase that much needed new equipment or update your old tech, like digital menu hardware – monitors, digital menu accessories, computers, media players and even whole upgrades like installation of digital menus that replace static menus. (Need help deciding what equipment works well for your locations? WAND experts can help you tailor your set up and procure upgraded hardware.)

Of course, check with your tax accountant first to ensure your purchase will qualify before you go on a spending spree. There are several qualifying factors and stipulations.

Just because you purchase capital equipment, doesn’t mean you automatically get the deduction; you must elect it. To elect to take the deduction, you’ll need to fill out Part 1 of IRS form 4562 and attach to your tax return.

Make the most of this deduction and savings by connecting with us for more information and asking us about specials on new products including Smart Stanchions, Smart Tags and more.