2024: The Year to Invest in Your Farm and Reap Record Tax Deductions!

As 2024 comes to a close, U.S. farmers have a unique opportunity to make substantial upgrades to their grain cleaning equipment with maximum financial benefits. Purchasing  grain cleaning and processing machines before the end of 2024 allows you to claim a tax deduction through Section 179, a powerful incentive to enhance productivity and streamline operations on your farm.

Why the Section 179 Deduction Matters

In 2024, the Section 179 deduction hit an all-time high of $1.22 million, marking the largest deduction the IRS has ever made available to businesses. Under Section 179, farmers can deduct the purchase cost of qualifying equipment bought and placed into service by December 31, 2024. 

This deduction is intended to encourage investment in the tools that improve farm efficiency, product quality, and profitability. However, in 2025, this deduction percentage will decrease by 20%, making 2024 a pivotal year to maximize tax savings on essential farm equipment.

Key Benefits of the 2024 Section 179 Deduction:

– Deduct Up to 60% of Equipment Costs
In 2024, Section 179 lets you deduct up to 60% of the purchase price of qualifying equipment – whether it’s new or used. The equipment simply needs to be purchased and in service by December 31, 2024. To claim this, file IRS Form 4562.

– Eligibility for a Wide Range of Equipment
The Section 179 deduction covers both tangible business property, like machinery, and certain improvements to non-residential properties. This includes software and other assets essential for business operations.

– Deduction Limits
The 2024 limits for Section 179 are $1.22 million for the deduction and $3.05 million for the phase-out threshold (both inflation-adjusted). 

Bonus Depreciation: Additional Savings in 2024

According to the IRS, bonus depreciation is an additional first-year deduction on qualifying business property, beyond regular depreciation. This incentive encourages businesses of all sizes to invest in new assets by offering tax relief.

Originally, bonus depreciation was limited to new equipment, but the Tax Cuts expanded it to include used equipment, as long as it’s the first use by the purchasing business. However, this benefit is gradually being reduced over the next few years.

With Section 179, not only can you save on taxes, but you’ll also equip your farm with tools that drive efficiency and enhance crop quality.

Beyond the deduction change up to 40%, prices for grain cleaning equipment are expected to rise in 2025 due to increased production costs and market demand. By investing now, farmers can secure the equipment they need at today’s prices while taking full advantage of this year’s tax incentives.

Don’t miss out on maximizing your tax savings while upgrading your farm with Metra’s grain cleaners by the end of 2024. Contact us today and take advantage of these benefits now!