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Section 179 Depreciation Deduction | Tax Tip of the Week | No. 61 October 6, 2010

Posted by bradstreetblogger in : Deductions, Tax Tip , trackback

Tax Tip of the Week | October 6, 2010 | No. 61
Depreciation Deduction

Section 179 Depreciation Deduction

Accelerate depreciation on your equipmentIf you’re a business owner, you are probably familiar with Section 179 and its benefits.  Section 179 allows business owners to fully deduct certain equipment purchases in the year they were purchased rather than depreciating the expense over several years.  To qualify, property must be used more than 50% in a trade or business and be acquired from an unrelated party.

Under The Small Business Jobs Act, you can now write off up to $500,000 of qualified business assets placed in service in tax years beginning in 2010 & 2011.  Without this law the maximum deduction would have been $250,000.  The maximum deduction phases out dollar-for-dollar for purchases exceeding a specified threshold.

The Small Business Jobs Act also extends a Recovery Act provision for Section 168 “Bonus Depreciation” allowing for up to 50% of the cost of new assets to be depreciated in the year of purchase.

For 2012, it looks like the maximum Section 179 deduction will be decrease to $25,000.

We’ll keep you posted.

As always, give us a call if you have any questions.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504. Or visit our web site.

This week’s author: Dawn Bradstreet, CPA

Rick Prewitt – the guy behind TTW

…until next week.


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