Section 179 of the tax code allows
businesses to deduct the entire cost of certain
types of property on their income taxes as an
expense in the year acquired rather than
capitalizing and depreciating it over time.
This
property, other than real estate, is generally
limited to personal property that is used in business
and trade.
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Section 179 of the IRS tax code allows
businesses to deduct the full purchase price
of qualifying equipment purchased or
financed during the tax year.
That means
that if you buy or lease a piece of
qualifying equipment, you can deduct the
FULL PURCHASE PRICE
from your gross income.
This incentive was
created by the US Government to encourage
businesses to buy or lease equipment and
invest the money into their businesses.
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In 2012, under
Section 179 of the IRS Code, businesses may expense the
first $139,000 of equipment purchased or leased, provided
that it is eligible equipment and placed in service by
December 31 2012. In some limited cases, the in service
deadline has been extended through December 31, 2013, for
certain assets that have longer production periods.
The Section 179
deduction allows businesses to reduce their current year’s
tax liability, which is an excellent incentive for small to
medium businesses to buy new equipment and/or software.
Equipment financed through a lease and/ or purchased without
financing is eligible for this benefit. For equipment
placed under lease, the lease has to be structured as a
capital leases for it to qualify for the deduction.
Businesses are eligible for Bonus & Standard Depreciation
for purchases in excess of $139,000. 50% Bonus Depreciation
expires on 12/31/12.
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