Deductions

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Deadline for Section 179

Dec 31st 2013

See A Step-By-Step Example

Section 179 - What Business Owners Need to Know

Section 179 is an opportunity for business owners to write-off the depreciation of equipment for the year they buy it.  It encourages businesses to purchase additional equipment right away, by allowing them to receive their full tax benefits on these purchases at once, as opposed to being spread out over a few years.

2013 Changes to Section 179

For 2012 and 2013 the tax law has been extended, in order to further stimulate the economy by encouraging business owners to buy more equipment.

2013 is the last year for this kind of Section 179 tax write-off under the Tax Payer Relief Act, so take advantage of this opportunity and buy any equipment you may need for your business before year-end.

2013 Possible Deductions

Deduction Limit

For 2013 the maximum deduction for Section 179 is $500,000. This is true for both new and used equipment alike.

Limit On Equipment Purchases

The maximum amount that can be spent on equipment is $2,000,000. After that the Section 179 write-off available begins to be reduced.

Bonus Depreciation

If your company exceeds the threshold for Section 179, you can elect Bonus Depreciation and write-off an additional 50% off of the excess amount. Note, however, that this deduction is only available on new equipment purchases.

Limits of Section 179

  • You must acquire your equipment before December 31, 2013.
  • You can write-off up to $500,000 under Section 179 and up to $2,000,000 with Bonus Depreciation.
  • Some property does not qualify including air conditioning/heating, equipment used outside the United States, property acquired by gift or inheritance.
  • Used equipment qualifies under Section 179, however it can not be applied to Bonus Depreciation.