SECTION 179
Section 179 of the IRS Code allows companies to deduct the cost of certain equipment as a business expense. The maximum deduction before the Small Business Jobs Act was $250,000 with a reduction by the amount that the cost of the investment exceeded $800,000.
The new law increases and extends the maximum Section 179 Deduction to $500,000, along with an increased cap of $2,000,000.
The increased deduction under Section 179 can be taken on new and used equipment alike. This particular deduction is in effect for the tax years of 2010 and 2011. You have to purchase equipment and place it in service within your 2010 and 2011 tax years to take the $500,000 deduction.
Bonus depreciation lets you save even more.
The second major provision of the new law is the extension of bonus depreciation, which can be combined with the Section 179 Deduction for additional savings.
Bonus depreciation enables you to take an additional
50% depreciation on new equipment purchased and placed into service prior to January 1, 2011.
With or without Section 179 and bonus depreciation, your tax savings over the course of six years will be the same. However, the purpose of the Small Business Jobs Act of 2010 is to create movement in the economy right now. The money you save in the short term can be reinvested in capital improvements, expansion projects, and more, so don’t wait — buy that new equipment today!
Learn more...
AED official website: www.depreciationbonus.org
CLICK HERE
James River Equipment is your local John Deere dealership for Virginia, North Carolina, and South Carolina. We also represent complimentary lines including Wirten milling equipment, Vogele compaction and rollers, Morbark grinders and wood processing equipment, Finn hydro seeders and blowers, and much more.
The Diclaimer: Please consult your tax advisor on the impact of Bonus Depreciation and Section 179 deduction on your business. We are not tax advisors (we sell equipment)!