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Using Section 179 to Make your Equipment Upgrades More Affordable

Posted On January 4, 2021 at 3:47 pm by / Comments Off on Using Section 179 to Make your Equipment Upgrades More Affordable

As we near the end of the year and begin thinking about taxes and about preparing for the upcoming planting season, now is a good time to consider purchasing any equipment you will need for the growing season.  Section 179 allows you to write off (deduct) the entire purchase price of qualifying equipment in the year it is purchased, making the actual cost of such equipment lower than it seems at first glance. The time to upgrade your chemical mixing or sprayer tender system is now so you are ready to go when the weather gives you that perfect window.

This article from Ag Direct, powered by Farm Credit, provides an easy-to-follow explanation of what Section 179 is and how you can use it to take advantage of significant tax savings in the upcoming year.

As mentioned above, Section 179 allows farmers to deduct 100% of the purchase price of qualifying equipment in the year it is purchased, rather than spreading that deduction out over the course of several years.  This helps create a quicker return on investment, lowering the effective cost of the equipment by generating tax savings in the year of purchase.

In 2021, Section 179 allows deduction of 100% of the first $1,050,000 of qualifying equipment purchased, with an equipment spending limit of $2,620,000.

Before making any large capital purchases, you should consult your tax adviser, but almost any large purchases you might make for use in your farming operations would qualify for the Section 179 deduction.

An efficient and economical way to upgrade your sprayer filling system is with the Dura-ABS™ Direct Injection System (Dura-ABS™ DI).  A typical 12 Volt Dura-ABS™ DI system with 3” plumbing costs less than $7,000, so let us assume a cost of $6,500 and take the Section 179 deduction on the entire purchase price.  For a taxpayer in the 35% tax bracket, that leads to a tax savings of $2,275, making the net cost of the equipment $4,225.  (To see exactly how section 179 can create savings and decrease the net cost of your equipment, section179.org has a useful calculator).  

When you consider the decrease in sprayer load time by up to 80%, the decrease in manpower needed to operate it, and improvement in chemical performance thanks to the Dura-ABS™ DI’s recirculation abilities, it quickly becomes evident that the Dura-ABS™ DI is a good investment made more affordable with the use of the Section 179 deduction.  And when you compare the price of the Dura-ABS™ Direct Injection system to the cost of other spray tender systems at a much higher price point, you can see how soon you can get a full return on your investment.

The Dura-ABS Direct Injection system is a 2020 AE50 award winner.  It works by direct injecting herbicides into the carrier flow while filling the sprayer.  Austin Woodward of Woodward Farms says, “Great filling system.  Went from 20 minutes load time with two people to less than 7 minutes by myself using the Dura Direct Injection system.  It also allows me to multi-task while filling my sprayer.  Takes hours off my machine and keeps me in the field.”

For more information on the Dura-ABS™ Direct Injection system or to purchase visit: 

System with 3-inch plumbing

System with 2-inch plumbing

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