Let’s say you’ve bought a new laptop, camera, or tool for your business—but you paid for it out of your own pocket, not through your S corporation. Now what?

Most business owners assume the deduction is lost. But under the right conditions, Section 179 can still work in your favor, even when you foot the bill personally.

Let’s break down how this works—and how to get it right.

First, What Is Section 179?

Section 179 lets a business deduct the full cost of qualifying equipment or property in the year it’s placed into service—rather than depreciating it over time.

It’s one of the most useful ways to lower your tax bill today, especially for small businesses making capital investments.

But What If You Paid for It?

If your S corporation didn’t buy the equipment—but you, the owner, did personally—there’s still a path forward.

You may be able to sell or contribute the equipment to your business. Once it becomes a corporate asset, and assuming it’s used for business purposes, your S corp may be able to take the Section 179 deduction.

There are a few important steps:

• There should be proper documentation of the transfer.

• The business should reimburse you, or you need to account for the fair market value if contributing it.

• The asset must be in service and used for business purposes in the same year.

Don’t Skip the Paper Trail

The IRS expects clarity. That means:

• A receipt showing the date of purchase

• Documentation of how and when the asset started being used for business

• A clear indication that the item is now a corporate asset

No shortcuts here—good records mean smoother deductions and fewer audit headaches.

Bottom Line

Even if you paid for something personally, you might still be able to turn it into a valuable deduction for your business—especially if you're proactive and organized.

If you’ve recently bought equipment and aren’t sure how to handle it, let’s talk it through. The right setup can save you real money at tax time.