Video instructions and help with filling out and completing Form 2220 Depreciated

Instructions and Help about Form 2220 Depreciated

In this video we're gonna talk about what section 179 is how it works and why it's important for you to know about it if you have your own business make sure to watch this whole video from start to finish because that's in this video I'll be showing you some examples on-screen of how this deduction works and how you might be able to reduce your taxable income what's up guys it's Mike and shepper if you're new this channel I just want to take a moment and say welcome highly consider subscribing because every single week on this channel I produce new videos that's going to help you with your finances your taxes investments and things that's gonna help you with your career and your everyday life okay guys today I'm going to attempt something crazy which is to try to explain the section 179 deduction in plain English and this video is actually requested by one of the subscribers of this channel so Jeff my brother is going to give you a big shout out and say thank you for recommending this topic this is a very cool tax topic to be talking about it's often very complicated but I'm going to try to break it down into plain English obviously guys i can't take every request that you guys give me but i felt that this was a really important tax topic for you to know about especially if you own your own business or someday you think you're thinking of starting your own business this can really help you and if you're not an accountant i understand a lot of you who watch this channel are not accountants so what you know why why should you even watch this well if you really want to know some of the tax deductions business owners have this is the one of the best ones to know about so to produce this video I had to write a series of notes and good news guys in the description section down below and also put it in the comment section down below I'm going to include a link to the document I typed up that gives you a basic summary of the section 179 deduction and I've even included on that document a direct link to the IRS Publication 946 and 179 in this video we're just going to cover the basics so that you have a general basic understanding of what it is and why why you would want to use it so let's start with why why do you want to use section 179 well if you're a business owner or like I said maybe considering becoming a business owner someday section 179 which is a tax deduction will allow you to reduce your taxable business income and sometimes I've seen it reduced people's taxable income in their business all the way to zero so at the end of the year they paid no tax and it's completely legal okay so what is section 179 section 179 is actually an election that allows you to accelerate the depreciation on an asset and you're like what the heck I probably already lost you guys or maybe lost most of you so every time I say the word depreciation think of that as an expense and an expense in a business that's what an expense reduces the taxable income of a business so when I say the word depreciation think of an expense especially if you're not an accountant that will help clear things up here and when I say eligible assets which I'm gonna be using that term a lot in this video what I mean is that every business hour most businesses they need machinery and equipment to run them so there's things like they might need computers they might need software they might need heavy machinery if they're a manufacturing facility right there's gonna be land buildings other types of assets so just assets that we buy when it's like equipment machinery that you can use to operate your business so in general that's what we're talking about when I say the term eligible assets you'll see as I progress through this video that accounting is like a separate language so you so I'm gonna try to explain it in plain English along the way and hopefully I haven't lost you already okay let's continue okay so that's what section 179 is is it allows us to accelerate depreciation on an asset which allows us to take a greater taxable expense deduction on our business tax return so in general every the reason we're talking about 179 just big picture big picture here guys and so that we can reduce our taxable income and pay less tax so we keep more money in our pocket and that's the whole reason we're talking about this now I will let you guys know that you cannot use section 179 to drive your business income into a negative number you can only reduce it to zero so keep that in mind guys as you're watching this video I understand this stuff is May be confusing especially for not an accountant but if you have questions or comments please leave them in the comment section down below I'll make sure to get back to you but I'm also going to really refer you to Alice well to that publication 941 by the IRS which will answer many of your questions and really really gets technical if you need or want that level of detail so who can take the 179 deduction people who own a business and have purchased property that is used for business purposes so when can you take the section 179 deduction in your business when can you take it you can take it as long as you have eligible assets things that would qualify for that deduction and you use the section 179 deduction within