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Is it more advantageous to take Section 179 deduction for large number of business books or list them under Other Business Expenses?

My consulting business purchased thousands of dollars of business related books related directly to my business that we plan to deduce.  I understand these can be deduced by taking a Section 179 Deduction or by listing them under All Other Business Expenses.  My business make a large profit this year, so is there a greater tax advantage to taking the Section 179 deduction rather than having them listed as all other expenses?  It seems that if there is no tax advantage, then they should be listed as other expenses right?


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Accepted Solutions
MaryEllen
New Member

Is it more advantageous to take Section 179 deduction for large number of business books or list them under Other Business Expenses?

When you use Section 179, the amount of the deduction is limited, based on total assets purchased and income of the business. If it is a pass through business, like a partnership or LLC, the deduction go directly to the partners or members instead of the business. Some states do not allow any or all of the Section 179 deduction. If you dispose of the asset before you have it 5 years, you will need to recapture and pay tax on the Section 179 deduction.

If you deduct the books as ordinary business expense, you are not subject to the income limits or partner pass-through requirements. 

Other than those differences, the deduction has the same affect on your taxes this year.

IRS Publication 946 has all the details about depreciating assets. https://www.irs.gov/pub/irs-pdf/p946.pdf

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1 Reply
MaryEllen
New Member

Is it more advantageous to take Section 179 deduction for large number of business books or list them under Other Business Expenses?

When you use Section 179, the amount of the deduction is limited, based on total assets purchased and income of the business. If it is a pass through business, like a partnership or LLC, the deduction go directly to the partners or members instead of the business. Some states do not allow any or all of the Section 179 deduction. If you dispose of the asset before you have it 5 years, you will need to recapture and pay tax on the Section 179 deduction.

If you deduct the books as ordinary business expense, you are not subject to the income limits or partner pass-through requirements. 

Other than those differences, the deduction has the same affect on your taxes this year.

IRS Publication 946 has all the details about depreciating assets. https://www.irs.gov/pub/irs-pdf/p946.pdf

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