What is Section 179?
The short answer is that it's a really easy way to save money and get your facility automated without a massive upfront investment. Tax Section 179 was created to encourage SMBs to invest in themselves, and it makes it where you can deduct the entire purchase price from your gross income when tax season comes around... if you want to see the actual dollar amounts that can translate to, keep on reading.
Do Robotics and Automation Qualify?
The short answer is yes, they do! Collaborative and industrial robots can qualify for the Section 179 tax break as long as the following conditions are met:
The equipment is leased or purchased. Now, it can still be a used piece of equipment...it just has to be new to you!
You can't buy the equipment from anyone that is related to you. So that means that parents, grandparents, descendants, charitable organizations or trusts that you have a relationship with cannot be the seller.
Your business must use the equipment in the same year you take the deduction. So let's say you bought a robot early in 2022, then you would need to make sure it gets deployed in your facility by the end of the year.
Lastly, you have to be running a profitable business to qualify for the cash savings. Cash flow positive = cash savings with Sect. 179.
How Much Can You Save?
Great question. So the short answer is that Section 179 can save you SIGNIFICANT amounts of cash. An easy way to get it figured out is by using this calculator: Sect 179 Calculator
This will reflect any amendments, limits, or bonus depreciation. We'll give you an example as well, so that you can see the general idea based on a $100,000 purchase price.
Let's say your business bought a flexible automation system that ran $100,000 and your business falls into the 35% tax bracket. Year one, you'd deduct that entire $100,000 and get 35% savings. So out of that $100,000 you would save $35,000. That's a lot of cash that's still in your possession!
Evaluate Your Robot
If you want to see some of the robots that we offer, check out our robotics page: BlueBay Automation | Robotics
These cover some of the main robots that we deal with on a daily basis, but we've also implemented other brands. So if you're dealing with an application and aren't sure the listed robots can accomplish the task, just send us a message and we'll look over your application and get you a suggestion.