How Changes to Section 179 May Affect C-Store Owners08 Nov 2017, Posted by Industry Information, News in
President Trump recently brought forth a new proposal that may have a substantial effect on businesses, especially those offering retail fuel services. This proposal could take a toll on convenience stores (c-stores), which are small retail establishments that provide fuel and are stocked with everyday essentials and groceries.
Here’s how c-store owners are impacted by the president’s recent proposal.
What is Stated in Section 179?
The government imposes various taxes on corporations and small businesses throughout the United States. However, tax deductions are also provided by the Internal Revenue Service. This deduction allows businesses to be able to deduct specific costs related to operations on income tax returns.
Section 179 is a deduction allowing tax-paying businesses and individuals to deduct the cost of certain properties and operations on income tax returns, decreasing tax liability. For example, if a convenience store might have to buy machinery that will contribute to business income. The store must deduct the cost of the purchase by taking depreciation deductions over several years until the asset is fully paid off. However, Section 179 authorizes businesses to deduct part or all the cost of the asset in the year it’s put in service.
Benefits of Section 179 for Convenience Stores
Minimize Tax Liability
Small businesses can minimize their tax liability by taking a deduction for certain properties they purchase within the year. Section 179 allows businesses and individuals to deduct the complete purchase cost of certain property such as equipment and tools during the tax year of purchase.
Better for Your Budget
Section 179 is a government-granted incentive, which helps small business owners with budgeting. In turn, this motivates owners to use their budget in other aspects of their business, such as marketing, inventory, or employee bonuses.
Although Section 179 doesn’t increase the total amount these businesses can deduct, it does permit them to get their full depreciation deduction within the span of one year. This is also known as Section 179 Expensing.
President Trump’s Tax Proposal
Although it is not officially set on record, President Trump’s tax proposal states that there will be a decrease in the depreciation benefit. His suggestion also says that this will lead to an increase in interest rates. Trump’s proposal will not only affect small businesses like convenience stores, but it will also have a great impact on similar industries and other locally owned companies.
The fuel industry is continuously changing, and it’s hard to predict its future. McPherson will help you maximize savings on the resources your business needs to keep running. We are proud to be the best production, relocation, and oil processing company in the southeast. Contact us or call 1-888-802-7500 today to learn more about products and fuel services.