|
   
   
   |
|
President Obama
signed the Tax Relief, Unemployment Insurance
Reauthorization and Job Creation Act of 2010 on
December 17, 2010.
Section 179 deduction limit is $500,000 with
phase outs beginning at $2,000,000 and ending at
$2,500,000. The Act also boosts 50% bonus
depreciation to 100% for qualified new equipment
purchases made after September 8, 2010, and
before January 1, 2012. The Tax Relief Act also
extends the treatment purchased computer
software as eligible property under Section 179.
|
|
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.
|
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.
|
In 2010,
under Section 179 of the IRS Code business may expense
the first $500,000 of equipment leased or purchased,
provided that it is eligible equipment and placed in
service by 12/31/11.
This allows businesses to reduce
their current year’s tax liability, which is a great
incentive for small to medium businesses to buy new
equipment or software. Both leased and purchased
equipment is eligible for this treatment.
There are limits to the deduction and it
phases out dollar for dollar after $500,000 with a phase-out
threshold of $2,000,000. Businesses are eligible for bonus &
standard depreciation for amounts in excess of $500,000.
Bonus depreciation expires on 12/31/10.
|
On March
18, 2010, President Obama signed the 'HIRE Act of 2010'.
The HIRE Act extends enhanced Code Sec. 179 expensing
threshold levels through December 31, 2010. This extension
means that the previous limits of $125,000 with a $500,000
cap is increased to $250,000 with an $800,000 cap through
the end of the calendar year 2010. Section 179 expensing,
unlike bonus depreciation, is available on both new and used
property.
To read
the Hire ACT of 2010 in its entirety, please click on this
link:
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=h2847enr.pdf
|
|
Section179lease.com is an informational site designed for
businesses that are considering acquiring business equipment
and are interested in potentially lease financing. It is
developed and sponsored by Encore Leasing Group, LLC.
The
information provided herein is a distillation of information
from the Section 179 of the US Internal Revenue Tax Code and
should only be used as a guide and not as a basis in making
any tax planning decisions; any such decisions should be
made after discussions with a qualified tax advisor or CPA.
|
|
