Section 179 Deductions
Jan 2, 2013 – Big news: Section 179 has received a nice boost for the 2013 tax year. To read details, download the 154 page H.R.8: American Taxpayer Relief Act of 2012. Better known as the “Fiscal Crisis Bill”, this raises Section 179’s limits for both the 2012 and 2013 tax years.
Here are the new Section 179 Deduction Limits for 2013 (and 2012 retroactive)
- 2013 Deduction Limit = $500,000
- 2013 Limit on Capital Purchases = $2,000,000
- 2013 Bonus Depreciation = 50%
*The above limits are as of 1/1/2013, and are for tax year 2013. In addition, 2012’s old limit ($125,000 deduction) has now been raised to $500,000 as well. This means qualifying purchases you made in 2012 can now take advantage of the new, higher deduction limits.
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 the given tax year.
2013 is the Year to Act
Due to the extension of Section 179 under the ‘HIRE Act of 2010’ – the enhanced limits under the ‘Jobs Act of 2010’ – and the extension of the enhancements into 2013 via the ‘American Taxpayer Relief Act of 2012’ – you can basically write-off 100% of the equipment and software your business needs to buy or finance up to $139,000 this year!
Successful businesses take advantage of legal tax incentives to help lower their operating costs. The Section 179 Deduction is a tax incentive that is easy to use, and gives businesses an incentive to invest in themselves by adding capital equipment. In short, taking advantage of the Section 179 Deduction will help your business keep more capital, while also getting needed equipment, vehicles, and software.