Legal Disclaimer: This article is written for informational purposes only and does not constitute professional financial advice. Please reference section179.org and a professional accountant for advice on financial planning and filing taxes.
As 2020 comes to an end, you might be thinking about all of this year's expenses and wondering what you might be able to write off on your taxes. You may even be considering whether or not to make a big purchase, weighing the tax deductions you could get if you bought it this year versus next.
Is it worth buying that new lift before the year ends? Or should you put it off until 2021?
What is Section 179?
Section 179 of the IRS tax code allows business owners to write off the entire cost of a piece of equipment, renovations, or other assets in the first year instead of writing off an asset a little bit at a time over a five, seven, fifteen, or thirty-nine year period. To give an example, if a shop owner buys a new tire machine, they could either write off the taxes over a seven-year period, or they can use Section 179 to get the entire deduction in the first year.
What Type of Costs Qualify for Section 179?
Tangible business property, including machinery and equipment
Leasehold improvements
Computer software*
*Is Tekmetric Eligible for Section 179?
Generally speaking, off-the-shelf computer software that has been purchased outright is eligible for Section 179. Because Tekmetric is a web-based software and does not make users sign a contract, it is not eligible for section 179, but it does qualify for a standard tax deduction.
What are Leasehold Improvements?
Leasehold improvements are any repairs or modifications that you make to your building or property, including adding a new roof, installing security or safety systems, and remodeling parts of your building without expanding the footprint. Without Section 179, leasehold improvements depreciate over 15 or 39 years, depending on what the improvements are. With Section 179, you can receive the entire deduction in the first year.
How Often Does Section 179 Change?
Section 179 is typically adjusted every several years. Most recently, Section 179 was adjusted in 2018 when the deduction limit was doubled and more types of purchases were made eligible. Section 179 may change again in the following years.
When Should You Use Section 179?
If you know that you’re going to pay taxes this year, and you have made a major qualifying purchase, then you may want to consider using Section 179 to save on your taxes and free up some cash flow for 2021.
If you financed a major purchase, you may want to consider how soon you plan on paying off that purchase and whether or not you would like to receive a tax deduction in the following years as you pay it off. For example, if you have a loan on a piece of equipment that you plan on paying over five or ten years, you may want to opt for the regular depreciated tax reduction so that you have money to offset those taxes in the following years.
Should You Make a Major Purchase Before the Year Ends to Use Section 179?
It’s not the wisest decision to buy something just to save money. It is true that Section 179, and tax benefits in general, are the best that they’ve been in years, but consider only making a major purchase if it is already in your plan and budget. If it is something that you already planned on buying in the next six months, then you may want to make the purchase before the end of the year to leverage Section 179’s tax deductions.
Talk to the Auto Repair Accounting Experts
Every situation is different. Take a look at what your tax rates are and ask yourself, "Is my income low enough this year where I'm actually reducing taxes at a pretty low rate? What do I think the tax rates are going to be in the future? Or will this benefit me more in the coming years when I think I'll be making more money?"
Talk to your accountant to form a game plan for all of this.
This article was written with the guidance of automotive repair industry CPA Hunt Demarest of Paar, Melis, & Associates, P.C.
Need help planning your taxes for 2020? Contact Paar, Melis, & Associates.
Tekmetric just revealed two new tools to help shops win more customers and run a more efficient front desk. Get the full story. Watch the on-demand webinar now.
Generating new business in auto repair is hard. The industry is projected to grow just 2% over inflation annually over the next five years. The average American has 15 auto repair shops within 10 miles of their home, according to Tekmetric's internal data, meaning competition for every new customer is fierce. And across multiple industry surveys, roughly two-thirds of drivers say they don't fully trust their local repair shop — making it that much harder to win them over. The result: only one in 10 shops both grows and hits profit margins of 20% or higher.
"We know the competition to win new customers is fierce,” said Lauren Langston, president and COO, Tekmetric. “That means we need the right strategies and the right tools in order to do it."
Tekmetric's data shows that winning shops consistently focus on four outcomes: car count, average repair order (ARO), driver experience, and cycle time. Two new Tekmetric products — Tekmetric Digital Ads and Tekmetric Phones — are built to move the needle on all four.
Tekmetric Digital Ads
Winning new customers starts with being found. Tekmetric Digital Ads is an AI-powered add on that helps your shop show up where high-intent drivers are already searching for auto repair on Google Maps and Apple Maps. Because it connects directly to Tekmetric, you can see exactly how your ad spend translates into real revenue, not just clicks.
"It's really hard to see what's working. One of the superpowers of this product is that it's connected directly with Tekmetric," said Jared Haleck, chief product officer, Tekmetric.
Tekmetric Digital Ads is in early access now and rolling out to selected customers.
Tekmetric Phones
Every missed moment at the front desk has a cost. Tekmetric Phones gives your service advisors the customer context they need — instantly, the moment the phone rings — so they can spend less time looking things up and more time taking care of customers.
"Service advisors especially are loving it,” Haleck said. “It just saves them so much time. It creates so much convenience for them.”
Tekmetric Phones is in beta, available for customers on RingCentral.
Watch the On-Demand Webinar
Langston and Haleck walked through all of it — the industry data, live product demos, and what's coming next — in their webinar, "Building for the Results-Driven Repair Shop."
2024 was a big year for Tekmetric and for the shops we support. Thank you to all the shops that supported us this year and for allowing us to be your partner. Find our 2024 highlights below.
Key customer wins
Tekmetric exists to help shops be more efficient and more profitable. Here are some of the notable wins our shops achieved in 2024:
Number of cars worked on: 28 million +
Number of Tekmetric releases: 44
Hours saved by adding a Smart Job to an RO: 4,700 + Hours
Number of photos added to inspections: 50 million +
Transactions processed through Tekmetric shops: 1.6 million + ($900 million processed)
Average ARO: $913.35 (That’s 167% higher than the national average!)
Top features used by customers:
Digital Vehicle Inspections
Two-Way Messaging
Smart Jobs
Tekmetric Payments
Counter Sales
Top product releases
Mobile app
Tekmetric Mobile allows shops to perform inspections faster and streamline their workflows. It is available for free in the Apple and Google app stores.
Tire suite
Our tire shop software helps shop owners streamline their operations, invoices, tire ordering, inventory management, and ensures regulatory compliance.
Payments
Tekmetric Payments received a rebrand in 2024 with it being added into the Tekmetric main portal plus more financing partnerships.
2024 Awards
G2
Tekmetric took home more hardware in 2024 including the G2 badges for most implementable, best usability and momentum leader. Ultimately, this led us to be ranked first for best auto shop management software by G2.
Silver Stevie Award
Tekmetric received the 2024 Silver Stevie Award for fastest growing tech company.
Houston Business Journal
Tekmetric earned a top 25 ranking in the best places to work for in 2024.
Top events
SEMA/APPEX
This year, Tekmetric had a significant presence at SEMA and APPEX. Our primary focus was on mobilizing and engaging with our customer base, driving demand for Tekmetric solutions, and increasing brand awareness.
At SEMA, the largest automotive trade show in the USA, which attracts about 140,000 attendees, we hosted the 5th Quarter and Yeti Giveaway Happy Hour event in our booth on Tuesday, Wednesday, and Thursday. This event featured drinks, snacks, and a raffle for a Yeti Prize Package, creating a relaxed and engaging networking atmosphere during the last hour of the show.
Vision
VISION Hi-Tech Training & Expo, a premier automotive service event for over 30 years, annually drew over 3,500 attendees. Focused on employee training, it offered hands-on lessons for technicians, service advisor training, and management sessions. The 2024 conference, held from February 19th to March 3rd at the Overland Park Convention Center, covered technical practices, standard operating procedures, KPIs, and service advisor sales approaches.
Tekmetric had a booth at this event, providing valuable networking and learning opportunities. The event also served as a marketing platform for top automotive companies to host sessions, sponsor, and exhibit, connecting with dedicated professionals and contributing to industry excellence. Additionally, we co-hosted a happy hour with Steer on March 1st, which allowed us to interact with more attendees in a relaxed and engaging setting.
Shop Hackers
The Tekmetric team attended Shop Hackers in early August as a Platinum Sponsor. Shop Hackers was one of Tekmetric’s key strategic events of the year, with a large portion of attendees being Tekmetric customers. Our focus as a revenue team was to ensure we leveraged the event and overall investment to:
Mobilize and engage our customer base.
Drive demand and adoption of Tekmetric solutions.
Generate brand awareness and visibility for Tekmetric.
At this event, we had the opportunity to speak directly with attendees and presented Tekmetric Unveiled: Latest Features and Upcoming Innovations, showcasing our newest developments and exciting future plans. We also launched the MVP Customer Advocacy Program, which allows us to recognize and engage our most valued customers. To further enhance the experience, we invited four of our customer shops to attend the event and share their experiences with Tekmetric.
Closing Thoughts
2024 was a big year for Tekmetric and the shops we support. As we look ahead to 2025, we are excited to join forces with Shopgenie and provide even more ways to streamline your shop operations. Lastly, thank you to all of the shops that allowed us to serve you in 2024 and we can’t wait to see what you + Tekmetric accomplish in 2025.
When he set off to create Tekmetric, founder and CEO Sunil Patel had an ace up his sleeve: experience running his independent auto repair shop.
Running a repair shop is the background of everything we do. It's that partnership between Tekmetric and the auto repair shops that leverage the platform daily that enable us to build the absolute best tool for the job: running an independent auto repair shop.
So we set out on a mission to deepen our connection with our customers and understand each shop's unique challenges and wins by visiting as many customers as possible.
We wanted to understand the unique challenges and victories each shop faces, to truly deepen our connection with you. The results? It blew us away. Your stories, your shops and your teams are the heart of what we do. You inspire us every day to provide the best solutions for the independent auto repair industry.
Tekmetric's Customer Obsession
Whether your shop is general repair, like brakes, fluids and check engine lights, or a specialized business focused on older European cars, there’s one thing that’s always the same: the amazing, critical work your shop does to get people back on the road!
And it’s your amazing shops that use Tekmetric that make all this possible. Our customers' valuable feedback is what helps us develop a better platform, and the proof is in the pudding.
No one knows what it takes to run an independent auto repair shop better than the teams that rely on Tekmetric to power their operations.
Here's what we heard from shops and why they love Tekmetric:
Tekmetric's ease of use and simplicity in running your shop
Everything you need to run your shop is organized, tracked, and maintained in one tool.
Whether you're a shop owner peaking into real-time performance reports or analyzing shop trends, a general manager ensuring cars flow quickly and efficiently through your shops, a service advisor supporting customers, or even a technician fixing cars, Tekmetric can help your shop operate like a well-oiled inline 6.
Tekmetric empowers shop to grow and reach their next level
We constantly hear how shop owners have leveraged Tekmetric to grow their business in ways they never expected.
Whether that means opening and managing multiple locations, simply adding a few new bays moving into a larger location, or even expanding your operations to service more customers, Tekmetric's simplicity and complete control over your shop makes it easy to track, plan, and grow.
Tekmetric's commitment to transparency and communication
Because we're so customer-obsessed, we're always here to help! As a cloud-based solution, Tekmetric helps run your shop by doing a lot of the operational "heavy lifting," so to speak.
Not only do we provide the right tools for the job, but we're here to partner with your shop. Our support doesn't end, and we're always a quick message or phone call away, anytime you need support!
Our Commitment to Shops Like Yours
Because we're here to help your great shop get even better, we're always open to hearing how we can make Tekmetric even better!
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