Section 179 Tax Deduction

Getting Ready for a New Year of Sublimation Success

Take advantage of the Section 179 deduction. Depending on your tax bracket, buying a new sublimation system now could be like getting a 35% discount!

In basic terms, Section 179 of the federal tax code allows you to deduct 100 percent of any qualified equipment purchases in the tax year in which it was purchased, rather than collecting a deduction for depreciation over the next five years.

In other words, if you bought a new printer that cost $1,600 before the end of the year, you could deduct the entire amount on your taxes, which would then reduce the amount of your taxable income. 

What's more, this deduction isn't limited to one purchase.

This sample calculation presents a potential tax scenario based on typical assumptions.

  • Equipment or Software Cost = $2,500
  • Total First Year Deduction = $2,500
  • Cash Savings on your Equipment or Software Purchase (assuming a 35% tax bracket) = $875
  • Cost After Cash Savings = $1,625
In reality, you should be focusing on taxes throughout the year, not just at the end. Ideally, you want to set up a strategy with the help of your accountant, business coach or financial adviser to ensure that you are taking full advantage of all the tax deductions you're entitled to as a small business owner.

    Review Your Year, Look for Deals

    Though it doesn't make sense to buy something just because it’s a great deal, buying strategically can help you start off the new year ahead of the game.

    First, take a look at your last years sales: What products sold well?  Does it make sense to keep a supply on hand?  Doing so will give you quicker turnaround times, but will also require a bit of an investment in inventory. However, if the discounts are good, consider buying the items you sell the most of in bulk and keep them in stock. This will translate into higher margins on future sales, plus you can also benefit from discounts based on quantity.

    While reviewing your sales, also pay attention to product size and order quantity. Then ask if your current sublimation system right for your production needs. The maximum media size of your printer and heat press limits what products you can create. For example, a unit like the Virtuoso SG400 is a great startup unit, but has can only produce prints up to 8.5” x 14.”  

    In reviewing your production over the past year, consider whether or not a larger printer may open up the doors to a wider range of services, such as large apparel prints, or help you keep up with high-volume sales. If so, a Virtuoso SG800, with a maximum media size of 13” x 19,” or a Virtuoso VJ628, which prints full-bleed on 24” substrates, would make nice holiday presents for your business.

    On the other hand, your current sublimation system might be ideal in terms of image size, but a bit slow in keeping up with production. Adding another printer to your shop might be a great solution, as it would double your printing output.Many high-volume shops manage their sublimation production needs with multiple small printers, like the SG400 and SG800 printers, rather than moving up to wide format systems.

    Ready to Move Up?

    Perhaps you find that you are ready to produce banners and signage, or want to venture into textile or photo panel production. The Virtuoso 25” 8-Color HD Product Decorating System featuring the VJ628 printer would be the right fit for you. The industry’s first fully integrated sublimation printing solution of this size, this system offers a best-in-class print engine, sublimation ink set, software and support - all in one package. It has been designed for high-volume, high-definition printing - and is built to last, even in the most demanding production environments.

    The system also delivers maximum flexibility, with eight ink channels that can accommodate SubliJet-HD’s dual CMYK inks (maximum print speed) or any of our eight-color ink specialty sets:

    • SubliJet-HD DUAL: DUAL CMYK ink set offers the fastest throughput of the three ink set options. Increased productivity. Bright and vibrant colors. Perfect for interior signage, textiles, personalized gifts and promotional products.

    • SubliJet-HD Pro Photo: Created for fine art and professional photographic reproduction, this ink set offers C, M, Y, K, Lc, Lm, Lk and Llk cartridges for fine detail, enhanced skin tones and deep, rich blacks.

    • SubliJet-HD Expanded Gamut (XG): This ink set offers the largest available gamut for color-critical applications and spot color matching. The SubliJet-HD XG set has C, M, Y, K, Lc, Lm, orange and blue cartridges, which makes attaining hard-to-match colors like reds, blues, purples and Pantone color much easier.

    Final Thoughts

    If purchasing additional equipment makes sense for your operation, remember our rule of thumb for printer purchasing: buy the smallest printer that will give you the largest the image that you need for routine production.

    If you were considering investing in a new sublimation printer this year, it might make better sense to purchase now taking advantage of the Section 179 deduction.

    Depending on your tax bracket, buying a new sublimation system now could get you a really nice deduction in April.