IRS Section 179 Section 179 has been enhanced for 2012 (retroactive) and 2013 thanks to H.R.8: American Taxpayer Relief Act of 2012 "Fiscal cliff / Fiscal Crisis" bill 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. Please Note: 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. Also, many businesses are finding Section 179 Qualified Financing to be an attractive option in 2013.
Tax Savings Calculator Equipment Cost: Enter Cost Sec 179 Deduction: 50% Bonus Depreciation: Normal First Year Depreciation: Total First Year Deduction: Cash Savings: (Assuming 35% tax rate) Lowered Cost of EquipmentAfter Tax Savings:
Qualified Property All Types of EquipmentSection 179 was designed with businesses in mind. Therefore almost all types of "business equipment" qualfies for the deduction. Purchase DatesMust be purchased and put into use before December 31, 2013 EquipmentPurchased for business use Tangible Personal Propertyused in business Business Vehicleswith a gross vehicle weight above 6,000 lbs Computers Software"Off the Shelf" Software Office Furniture Office Equipment Attached PropertyProperty attached to your building that is not a structural component of the building (i.e.: a printing press, large manufacturing tools and equipment) Partial Business UsePartial Business Use (equipment that is purchased for business use and personal use: generally, your deduction will be based on the percentage of time you use the equipment for business purposes).
Non Qualifying Real PropertyReal Property does not qualify for the Section 179 Deduction. Real Property is typically defined as land, buildings, permanent structures and the components of the permanent structures (including improvements). Other examples of property that would not qualify for the Section 179 Deduction include paved parking areas and fences. HVACAir conditioning and heating equipment is generally not eligible for the Section 179 Deduction. Used Outside the USProperty used outside the United States generally does not qualify for the Section 179 Deduction. Acquired by GiftProperty acquired by gift or inheritance, as well as property purchased from related parties does not qualify for the Section 179 Deduction (No, you can't sell equipment to yourself and qualify for Section 179). Personal PropertyAny property that is not considered to be personal property, may not qualify for the Section 179 Deduction. Used EquipmentUsed Equipment (that is new to you) qualifies for Section 179, however used equipment does not qualify for Bonus Depreciation.