What is the Difference between Section 179 Expensing and Bonus Depreciation for Business Equipment?
While both Section 179 and bonus depreciation allow you to recover the cost of qualifying equipment like POS hardware and off-the-shelf software immediately, they function with different rules and limitations:
- Maximum Deduction and Phase-Out: Section 179 has a maximum annual deduction limit ($1,220,000 for 2024) and a phase-out threshold ($3,050,000 for 2024). Bonus depreciation has no dollar cap or investment-based phase-out threshold.
- Income Limitations: Section 179 deductions cannot exceed your business’s taxable income for the year, though disallowed amounts can be carried forward indefinitely. Bonus depreciation has no income limit and can create or increase a net operating loss (NOL).
- Application Order: When using both, Section 179 is applied first to the cost of the asset. Bonus depreciation is then applied to the remaining basis.
- Default Status: Section 179 requires an affirmative election on IRS Form 4562. Bonus depreciation applies automatically to qualifying property unless you specifically choose to opt out.
- Percentage Limits: Section 179 allows for a 100% write-off of the purchase price up to the cap. Bonus depreciation for 2024 is reduced to 60% of the adjusted basis (down from 80% in 2023).
We offer a broad selection of hardware from brands like Clover, Lavu, and Revel that may qualify for these deductions. Merchants must qualify for free or discounted hardware through our promotional programs. Because tax laws are complex, we always recommend consulting a tax professional to align these strategies with your specific business goals.
Related FAQs
-
What are the Payment Integration Options for Restaurant Pos Systems?
Read More »: What are the Payment Integration Options for Restaurant Pos Systems?The POS Brokers provide various restaurant POS systems that feature diverse payment integration capabilities designed to improve transaction efficiency and security. Key payment integration features across their primary offerings include: Clover POS: Features native EMV and NFC support with wholesale…
-
What are the Options for Mobile Pos for Restaurants?
Read More »: What are the Options for Mobile Pos for Restaurants?Mobile POS systems for restaurants enhance service by allowing for tableside ordering, curbside service, and line-busting during peak hours. The POS Brokers provide several mobile-capable solutions tailored for both full-service and quick-service environments. Key mobile POS options include: Clover Flex:…
-
What Pos Systems are Available for Restaurants?
Read More »: What Pos Systems are Available for Restaurants?The POS Brokers offer several industry-leading POS systems tailored for different restaurant environments. Choosing the right system depends on whether you operate a full-service establishment or a quick-service restaurant. Top POS Options: Clover POS: A versatile solution offering touchscreen terminals…
-
What is a Cash Flow Analysis?
Read More »: What is a Cash Flow Analysis?Cash flow analysis is the financial process of evaluating a business’s cash inflows and outflows to assess its liquidity. This foundational tool helps business owners identify potential financial issues before they escalate and ensures that daily operations run smoothly. For…
-
What is Cash Flow Analysis?
Read More »: What is Cash Flow Analysis?Cash flow analysis is the financial process of evaluating a business’s cash inflows and outflows to assess its liquidity. This foundational tool helps business owners identify potential financial issues before they escalate and ensures that daily operations run smoothly. It…

