If you are the owner of a small to medium-sized business looking for ways to reduce your tax liability and increase your productivity, you may want to consider investing in industrial robotic automation. Robotic automation in itself can help your business save time, money, and resources over time while improving overall quality, accuracy and efficiency. However, the high upfront cost of a robotic automation system may be a deterrent for many businesses, but there are ways to lessen the upfront cost.
One of those ways is by leveraging the Section 179 tax deduction. Section 179 allows your business to deduct the full cost of qualifying equipment that you purchase or finance during the tax year, up to a certain limit. This means that you can write off the entire cost of your robotic automation investment in the year that you integrate it, rather than depreciating it over several years. This can significantly lower your taxable income and increase your cash flow.
To qualify for the Section 179 deduction, the automation equipment must be used for business purposes more than 50% of the time and must be placed into service in the same year that you claim the deduction. The limit for the Section 179 deduction in 2024 is $1,220,000 and it begins to phase out when you spend more than $3,050,000 on qualifying business equipment. Not only that, you can also claim a 60% bonus depreciation on any amount that exceeds the Section 179 limit, or on any equipment that does not qualify for Section 179.
What are the next steps?
Section179.org provides a tax deduction calculator that will give you an idea of how much money you will get back on a deduction. Otherwise, if you are interested in taking advantage of the Section 179 tax break for robotic automation, you should consult with a tax professional to determine your eligibility and the best way to maximize your savings. Robotic automation can be a smart and strategic investment for your business, more so if you can reduce your tax burden at the same time.
Tax breaks such as Section 179 give start-ups the capital they need to get up and running, and existing businesses the resources they need to stay competitive. Midwest Engineered Systems has decades of experience in integrating robotic automation systems for businesses of all sizes. Regardless if your business is looking for robotic welding, material handling automation, robotic palletizing/depalletizing or any other form of robotic automation, we have the experience and know-how to enhance your manufacturing operation. Furthermore, robotic automation can save your business money in the long run when moving away from manual operations, which is an added incentive to invest in robotics.
Contact us today and speak with one of our Applications Engineers to see how we can enhance your manufacturing process.