Section179Lease.com

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 $250,000 of equipment leased or purchased, provided that it is eligible equipment and placed in service by 12/31/10.

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 $250,000 of equipment is acquired. Businesses are eligible for standard depreciation for amount in excess of $250,000.

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.

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On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009, which extends The Section 179 Deduction through 12/31/09. To read more about, click on the link to the Internal Revenue Services website. http://www.irs.gov/newsroom/article/0,,id=204335,00.html

Please Note: This does not pretend to be a synopsis, but highlights.  If you are really serious, you may  obtain a copy of the STIMULUS BILL and ability to send a comment: http://www.whitehouse.gov/the_press_office/ARRA_public_review/

Disclaimer: This site is intended to provide you with a brief overview of the Section 179 Deduction and Bonus Depreciation that is available through 12/31/09. All tax based decisions should be made solely on your own research that you make independently of this site and consultation with your CPA or tax professional. We are not tax advisors or tax professionals and take no responsibility for any of the actions or decisions that you make based on your review of the contents of this site.

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