The Section 179 Tax Deduction - Expaned to $500,000!
The following are Section 179 changes:- An increase of the total amount available for deduction to $500,000 (up from $250,000).
- An increase to the total amount of equipment purchased to $2 million (up from $800,000).
- The above numbers are to be in effect for 2010 and 2011.
- In addition, the bill also extended the “50% bonus depreciation” to tax year 2010 (it was rescinded earlier this year, but has been restored.)
Practices Equipment
Section 179 allows practices to deduct equipment purchased (software, computers, machinery) in a single tax year as oppose to over multiple years. For 2011, Congress has increased this deduction amount to $500,000.
Under Section 179, practices that spend up to 2 Million a year on qualified equipment, may write-off up to $500,000. The rules are designed for small companies.
Benefits:
Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income.
Three Reasons to Invest in Yourself
- Section 179 is valid on most types of equipment - Section 179 is aimed at general business equipment. If you use it in your business, it probably qualifies.
- Section 179 can expand your bottom line - By taking the full cost of the equipment when deducting, you substantially lower the total amount you pay for equipment. These benefits can be further expanded if you choose to lease or finance equipment.
- Ease of Use - All you need to do is purchase equipment and elect to take the deduction when you file your tax return for the year. This is done by simply filling out Part 1 of IRS form 4562 and attaching it to your tax return.
Why You Should Not Wait
If you have not purchased or leased equipment in 2009, you need to act now before the tax incentive is no longer available. As of today, The American Recovery and Reinvestment Act of 2009 has extended the one-year increase of Section 179 deductions through the end of 2009. The Section 179 Deduction will be phased out completely in 2010.
Remember to act before year's end in order to receive this tax incentive.
