Understanding Pennsylvania's Section 179 Deduction

Pennsylvania's tax landscape is ever evolving, and it's crucial for businesses to stay informed about changes that may impact their bottom line. The Commonwealth has updated its  Section 179 deduction rules effective for tax year 2023

The Section 179 deduction is a tax incentive that allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. This deduction is particularly valuable for small and medium-sized businesses, offering them the opportunity to write off qualifying capital expenditures immediately, rather than depreciating the costs over several years.

Prior to the release of Personal Income Tax Bulletin 2023-02, PA deductions for Section 179 property were capped at $25,000 annually. The new rules increase the available deduction for PA taxpayers to $1,000,000 annually, still subject to limitations based on the business’s taxable income.

Understanding Pennsylvania's Section 179 deduction is essential for businesses aiming to optimize their tax positions. If you own a business, Schreiber Accounting and Advisory can help you understand the Federal and state Section 179 deductions available, and plan to maximize their value to you with Tax Preparation and Planning. Contact the firm for more information.

Material discussed is for informational purposes only. It is not to be interpreted as investment, tax, or legal advice. Individual situations vary, and this information should only be relied upon when coordinated with individual professional advice.