Did you know that there’s only a month left to take advantage of the Section 179 tax savings for qualifying building upgrades? One of those qualifying building upgrades can be installing epoxy pipe lining in order to extend the life of your existing plumbing pipes and stop small leaks, but you have to finance, install and use the equipment by December 31, 2019 at midnight. This means there’s not much time left to take advantage of this savings method for 2019.
Section 179 Tax Code Highlights
Section 179 was updated with the Tax Cuts and Jobs Act. The biggest benefit of Section 179 is that it allows businesses to write-off the entire purchase price of the qualifying equipment in the year it was installed and the business began using the equipment. However, it’s a good idea to take advantage of this tax code while it is available. Section 179 is updated every year, and the code has even been updated in the middle of a year.
- You can deduct up to 1 million dollars.
- You can purchase up to 2.5 million dollars of qualifying equipment.
- There’s a bonus depreciation available up to 100 percent.
Eligible Equipment Under Section 179
Section 179 contains a list of all the business equipment that is eligible for this massive tax write-off. However, the equipment must be put into use and used by midnight on December 31st in order to qualify. It’s also important to note that the equipment can be new, used or refurbished, but it must be new equipment as far as your business is concerned. The tax code also doesn’t care how you purchased the equipment. You can deduct the costs if you’ve purchased, financed or leased your building’s new 2019 equipment.
- Equipment Purchased Exclusively for the Business
- Hard-Goods or Personal Property that Is Tangible
- Business Vehicles that Weigh More Than 6,000 Pounds
- Computers and Computer Software
- Office Furniture and Office Equipment
- Building Improvements, Including HVAC, Roofing, Fire Suppression and Security Systems
- Equipment Purchased for Both Business and Personal Use
Sections 179 Financials
In order for the piece of business equipment or building upgrade to qualify, it must be used for business at least 50 percent of the time. For the financial aspect, we need to know a little bit about the average cost of pipelining per foot. It is estimated that pipelining, on average, costs between $125 and $165. However, it could be less or more, depending on the pipe diameter. For the purposes of this financial estimate, we’ll assume $150 per linear foot, and there are 4,000 feet of pipe that need lined. The total pipe lining cost would be $600,000. This is less than the 1 million dollar write-off limit.
- Percentage of Pipe Lining Costs that Can Be Written-Off – $600,000
- Percentage of First-Year Depreciation – $0 (Because the cost was not above 1 million)
- Entire First Year Deduction – $600,000
- Your Business’ Cash Savings for Pipe Lining Installation – $210,000
- Pipe Lining Cost After Section 179 Deduction – $390,000
Understanding What This Means for Your Plumbing Pipes
Plumbing pipe installations and epoxy pipe lining rehabilitations in Chicago are covered under the Building Improvements clause. This is because you are making an improvement/upgrading your building’s plumbing system in order to extend its useful life. When you choose pipelining, you’ll be sealing leaks, improving water flow through your pipes and eliminating future corrosion of the host pipe, and you’ll be doing it all without ripping open your walls, which damages drywall. If your building happens to be a historic structure, you’d also damage your pastor and historic finishes if you chose a traditional pipe replacement with a local Chicago plumber, which may be difficult, if not impossible to replace. This is the reason most owners of historical buildings choose epoxy pipelining.
Getting Started in the Pipelining Process
Since the current Section 179 expires in a month, and we don’t know what Section 179 will look like next year, it’s important to get started in the process right away.
Step 1 – Call for a Pipelining Estimate
The first step is calling us at 815-790-9000 to learn more about the benefits of pipelining and the process. One of our dedicated and experienced pipe lining technicians would be happy to speak with you and answer all of your questions. If you are interested in getting your pipes lined, our technicians will come out to your building, inspect your system, listen to your concerns and provide you with a detailed estimate, which can help you make the decision to line or not line your plumbing pipes.
Step 2 – Pipe Inspection, Diagnosis and Equipment Set-Up
If you decide that pipelining is right for your building, we will order all the needed supplies and schedule your installation. Installation always starts with a pipe system diagnosis and inspection. During this process, we make small pipe repairs in order to ensure the system can withstand the cleaning and lining process. We also create access points to your plumbing pipes, which requires cutting a square in the drywall and installing an access door. This means that you do not have to complete any drywall repairs after your pipelining, and you will receive additional access points to your plumbing pipes that are permanent. Next, we set-up our equipment and connect that equipment to your existing plumbing system.
Step 3 – Cleaning Your Plumbing Pipes
Before we can install the epoxy pipe coating or pipe liner, we must thoroughly dry and clean your plumbing pipes. The drying process is accomplished by flowing warm air through the pipes that are to be lined. Once the pipes are dry, a grit or sand-like substance is blown through the pipes in order to remove all the debris and corrosion that has built-up on the insides of the pipe walls.
Step 4 – Plumbing Pipes Are Lined
Pipelining can only be installed in pipes that have been cleaned down to their pipe walls. Once this is accomplished, we either line your pipes with a pipe liner (drain and sewer lines), or we line your pipes with an epoxy coating (potable water plumbing pipes). Once the pipes have been lined, they are left to cure for about 24 hours. The entire pipe lining process takes a few days for each set of plumbing pipes. For large buildings, we typically line pipes according to the riser. The benefit of this is that your entire building’s water supply is never completely off. Instead, only the units connected to the pipes that are being lined will be affected by a water shutoff, and that shut-off isn’t long-lasting. We take steps to provide your residents with water in the early mornings and in the evenings.
Step 5 – System Is Fully Returned to Service
Once the pipe coating or lining process is complete and the epoxy has completely cured and dried, water service is fully restored. If multiple risers are to be lined in your building, we immediately start on the next riser.
To learn more about the pipe lining process and to get an estimate for the total costs and time-line, give us a call at 815-790-9000. Don’t forget to ask us about our warranties.