January 1, 2018 and Beyond
With the passage and signing into law of The
Tax Cuts and Jobs Act, the deduction limit for Section 179 increases to
$1,000,000 for 2018 and beyond. The limit on equipment purchases has increased
to $2,500,000.
Furthermore, the bonus depreciation is 100% and is made retroactive to
9/27/2017 and good through 2022. The bonus depreciation also now includes used
equipment.
We have an updated
2018+ easy to use calculator that will help you estimate your potential tax
savings. Simply enter the purchase price of your
equipment, and let the calculator take care of the rest.
It is important to note that you may not have to write a big check to purchase
your equipment. You could claim the deductions and simply make small monthly
payments to pay for the use of the equipment over time through a properly
structured lease. Moreover, the tax
savings could be used to make some of the monthly payments thereby reducing
the overall cost of ownership.
You
should consult with your tax advisors to determine how you can use leasing to take
advantage of the Section 179 tax savings this year.
January 1, 2017
Section 179 is
still affected by the "Protecting Americans from Tax Hikes Act of 2015" (PATH
Act) that was signed into law on 12/18/2015. This bill expanded the
Section 179 deduction limit to $500,000, where it will remain for all of
2017.
Section 179 Deduction: Until
further notice, Section 179 will be permanent at the $500,000 level.
Businesses exceeding a total of $2 million of purchases in qualifying
equipment have the Section 179 deduction phase-out dollar-for-dollar and
completely eliminated above $2.5 million. Additionally, the Section 179 cap
will be indexed to inflation in $10,000 increments in future years.
50% Bonus Depreciation will
be extended through 2019. Businesses of all sizes will be able to depreciate
50 percent of the cost of equipment acquired and put in service during 2015,
2016 and 2017. Then bonus depreciation will phase down to 40 percent in 2018
and 30 percent in 2019.
We have an updated
2017 easy to use calculator that will help you estimate your potential tax
savings. Simply enter the purchase price of your
equipment, and let the calculator take care of the rest.
January 1, 2016
The "Protecting Americans from Tax Hikes Act of
2015" (PATH Act) was passed on December 18, 2015. The law was made
effective for the 2016 tax year. The Section 179 deduction for 2016 is
$500,000. In addition, the 50% Bonus Depreciation was reinstated.
We have an updated
2016 easy to use calculator that will help you estimate your potential tax
savings. Simply enter the purchase price of your
equipment, and let the calculator take care of the rest.
December 18, 2015
The PATH Act was passed and made retroactive for
the 2015 tax year. The Section 179 deduction for 2015 is $500,000.
In addition, the 50% Bonus Depreciation was reinstated.
We have an updated
2015 easy to use calculator that will help you estimate your potential tax
savings. Simply enter the purchase price of your
equipment, and let the calculator take care of the rest.
January 1, 2015
At this point, the Section 179 limit has been
reduced to $25,000 and no bonus depreciation is available for the 2015 tax
year.
December 17, 2014
H.R. 5771 (the Tax Extenders Bill) passed by the House on December 3, 2014 was voted on and passed by the Senate on December 16, 2014 retroactively expanding the Section 179 deduction limits thru 12/31/2014. The new law reinstates the limit on Section 179 to $500,000 as well as reinstates 50% Bonus Depreciation. The bill only applies to the year 2014, and not 2015, and requires the property be delivered, placed into service, and accepted in 2014.
We have an updated
2014 easy to use calculator that will help you estimate your potential tax
savings. Simply enter the purchase price of your
equipment, and let the calculator take care of the rest.
January 1, 2014
For the upcoming 2014 tax year, Section 179 has been restored to its original limits of $25,000 plus an adjustment for inflation.
January 1, 2013- Section 179 Update for 2013 & 2012
Section 179 has been enhanced for the 2013 and 2012 tax years (2012 is
retroactive). This is due to the passage of H.R.8: American Taxpayer Relief
Act of 2012 (The "Fiscal Cliff / Fiscal Crisis" Bill).
2013 and 2012 (Retroactive) Deduction Limit = $500,000
2013 and 2012 (Retroactive) Limit on Capital Purchases =
$2,000,000
2013 and 2012 (Retroactive) Bonus Depreciation = 50%
Please Note:
Section 179 includes a ceiling that will reduce
the deduction when various spending limits are reached. The amount available
to be expensed is reduced dollar for dollar for the amount of qualifying
capital expenditures in excess of the ceiling. Therefore, the 179 expensing is
not available in 2013 and 2012 if qualifying expenditures exceed $2,500,000
($500,000 + $2,000,000). In addition, Section 179 expense is limited to taxable
income and cannot create a taxable loss for the taxpayer.
Section 179 Deduction is available for most new and used
capital equipment, and also includes certain software.
Bonus Depreciation can be taken on new equipment only (no used
equipment, no software)
When applying these provisions, Section 179 is generally taken
first, followed by Bonus Depreciation � unless the business has no taxable
profit in 2013 or 2012.
We have an updated
2013-2012 easy to use calculator
that will help you estimate your potential tax
savings. Simply enter the purchase price of your
equipment, and let the calculator take care of the rest.
September 1, 2012-Section 179
The 'Tax Relief Act of 2010' as well as the 'Jobs Act of
2010' affect Section 179 in a positive way for the 2012 tax year. Following
are the highlights:
2012 Deduction Limit = $139,000
Section 179 Deduction limit after adjustment for
inflation has increased to $139,000 (maximum allowance would have been only
$25,000 prior to the new legislation).
2012 Limit on Capital Purchases = $560,000
Section 179 Threshold for total of equipment & software
that can be purchased has increased to $560,000 (threshold would have been
only $200,000 prior to the new legislation).
2012 Bonus Depreciation = 50%
The new law allows 50% �Bonus Depreciation� on qualified
assets placed in service during 2012
Please Note:
Section 179 includes a ceiling that will reduce
the deduction when various spending limits are reached. The amount available
to be expensed is reduced dollar for dollar for the amount of qualifying
capital expenditures in excess of the ceiling. Therefore, the 179 expensing is
not available in 2012 if qualifying expenditures exceed $699,000
($139,000 + $560,000). In addition, Section 179 expense is limited to taxable
income and cannot create a taxable loss for the taxpayer.
Section 179 Deduction is available for most new and used
capital equipment, and also includes certain software.
Bonus Depreciation can be taken on new equipment only (no used
equipment, no software)
When applying these provisions, Section 179 is generally taken
first, followed by Bonus Depreciation � unless the business has no taxable
profit in 2012.
We have a 2012 easy to use calculator
that will help you estimate your potential tax
savings. Simply enter the purchase price of your
equipment, and let the calculator take care of the rest.
September 27, 2010
Small Business Jobs and Credit Act of 2010
President Obama signed the Small Business Jobs and
Credit Act, which allows businesses to write-off 50 percent of the cost of
depreciable property purchased or leased (including software) and placed in
service during 2010--the 2011 write-off is 100%. This provision is a temporary extension of the bonus
depreciation provision included in both the 2008 and 2009 economic stimulus
laws. The new law also includes a provision that increases Section 179
expensing for two years by increasing the expense limitation from $250,000 to
$500,000 and increasing the dollar-for-dollar phase-out threshold from $800,000 to $2 million for years 2010
and 2011.
We have a
2011 easy to use calculator that will help
you estimate your potential tax savings. Simply enter the purchase price of your
equipment, and let the calculator take care of the rest.
February 13, 2009
American
Recovery and Reinvestment Act of 2009 has officially extended the Section 179
Deduction increases made available in the Economic Stimulus Act of 2008
through December 31, 2009
The Section 179 Deduction has been
significantly enhanced by the Economic Stimulus Act of 2008, and now
extended an additional year by the American Recovery and Reinvestment Act of
2009, giving businesses an incentive to invest in themselves by purchasing or
leasing new equipment.
February 13, 2008
President Bush signed H.R. 5140, otherwise known
as the Economic Stimulus Act of 2008. The Economic Stimulus Act immediately
grabbed headlines because most Americans would receive a check for $600 from
Uncle Sam. While the Economic Stimulus Act was a boon for consumers,
there were significant benefits in the Economic Stimulus Act for businesses as
well
The specific impact the Economic Stimulus Act has
had on the Section 179 deduction is related to the dollar limits of the
deduction. The previous dollar limits were a $125,000 limit on the deduction
and the total amount of equipment purchased could not exceed $500,000. The
Economic Stimulus Act raised these limits significantly. The new deduction
limits are $250,000 on the deduction, and the total amount of equipment
purchased cannot exceed $800,000.
February 08, 2008
Stimulus Package Offers
Equipment Purchase Incentives to Business
Congress approved a $168 billion bill to boost the
economy, paving the way for businesses to write off equipment purchases made
this year more quickly.
The following provides insights into the business tax and bonus depreciation
provisions:
Business Tax Provisions:
Elective Expensing (Section 179). In lieu of depreciation, small business
taxpayers may elect to expense the cost of qualified assets (property) they
purchase in the year when the assets are placed in service, within certain
limits. Under section 179, small business taxpayers are allowed to expense
$125,000 (indexed for inflation), and the phase-out threshold is $500,000
(indexed for inflation). Currently in 2008, the expensing limit is $128,000
and the phase-out threshold is 510,000. The proposal increases the expensing
limit to $250,000 and the phase-out to $800,000 for 2008. The proposal is
effective for taxable year 2008. This proposal is estimated to cost $900
million in 2008 and $100 million over ten years.
Bonus Depreciation. Generally a trade or business must recover the cost
of property over a predetermined period of years. This proposal will allow a
trade or business to depreciate an additional 50 percent of the cost of an
asset acquired and placed into service in 2008 in that year. The types of
property eligible for bonus depreciation will be the same as those included in
the previous depreciation packages: (1) tangible property that had a recovery
period not exceeding 20 years; (2) purchased computer software; (3) water
utility property; and (4) qualified leasehold improvement property. The bonus
depreciation will be allowed under the alternative minimum tax (AMT). The
proposal is effective for calendar year 2008 beginning after the date of first
Committee action. This proposal is estimated to cost $43.9 billion in 2008 and
$7.4 billion over ten years.
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