IMTS Blog

Expansion of the Section 179 Deduction: Will It Really Get Businesses To Spend Money Again?

RE-POSTED FROM www.gorbel.com/blog




"I would never have thought that anything relating to the IRS would make for an interesting blog topic, but our Vice President brought this to my attention this week and I wanted to share.

On September 25, the Small Business Jobs Act of 2010 became law.  The folks over at The Business Owner did a great job of breaking down what that means, so I'm going to shamelessly steal their explanation:

In an effort to get businesses spending money again, the government has rolled out new incentives to buy equipment and make improvements. If you have taxable income and the ability to fund expenditures, here’s your chance to reduce the present value of the taxes you pay on profit.

• Extension and expansion of the Section 179 deduction: Small businesses may immediately write off 100% of the cost of up to $500,000 of new  or used equipment purchased or 50% of leasehold improvement expenditures made in 2010 or 2011. It can be used only to reduce taxable income, i.e., it cannot be used to book a profit and thereby gain a tax refund.

• Bonus depreciation: Businesses of any size can write off half the cost of purchases of new equipment made in 2010 or 2011 even if such causes a net loss.

Are you debating whether or not to purchase new equipment this tax year?  We found a calculator over at Section179.org that can help you determine what the new Section 179 Deduction limits could mean for your tax savings and equipment costs.

This is great news for business owners.  Wonder what impact it will have on capital equipment sales..."

 

For more information about Section 179 and the bonus depreciation extension please see: http://www.amtonline.org/images/userContent/20102011depreciationsummary.pdf

 

 



Comments