section 179  
Capital Resources, LLC  Equipment Leasing | Equipment Finance
 
 

January 1, 2014

For the upcoming 2014 tax year, Section 179 has been restored to its original limits of $25,000 plus an adjustment for inflation.

January 1, 2013- Section 179 Update for 2013 & 2012

Section 179 has been enhanced for the 2013 and 2012 tax years (2012 is retroactive). This is due to the passage of H.R.8: American Taxpayer Relief Act of 2012 (The "Fiscal Cliff / Fiscal Crisis" Bill).

2013 and 2012 (Retroactive) Deduction Limit = $500,000

2013 and 2012 (Retroactive) Limit on Capital Purchases = $2,000,000

2013 and 2012 (Retroactive) Bonus Depreciation = 50%
 

Please Note:

Section 179 includes a ceiling that will reduce the deduction when various spending limits are reached. The amount available to be expensed is reduced dollar for dollar for the amount of qualifying capital expenditures in excess of the ceiling. Therefore, the 179 expensing is not available in 2013 and 2012 if qualifying expenditures exceed $2,500,000 ($500,000 + $2,000,000).  In addition, Section 179 expense is limited to taxable income and cannot create a taxable loss for the taxpayer. 

Section 179 Deduction is available for most new and used capital equipment, and also includes certain software.

Bonus Depreciation can be taken on new equipment only (no used equipment, no software)

When applying these provisions, Section 179 is generally taken first, followed by Bonus Depreciation – unless the business has no taxable profit in 2013 or 2012.

We have an updated 2013-2012 easy to use calculator that will help you estimate your potential tax savings. Simply enter the purchase price of your equipment, and let the calculator take care of the rest.

It is important to note that you may not have to write a big check in 2013 or 2012 to purchase your equipment.  You could claim the deductions and simply make small monthly payments to pay for the use of the equipment over time through a properly structured lease.   Moreover, the tax savings could be used to make some of the monthly payments thereby reducing the overall cost of ownership.

Please consult with your tax advisor to determine if you can benefit from Section 179 and the Bonus Depreciation.

 

 

September 1, 2012-Section 179

The 'Tax Relief Act of 2010' as well as the 'Jobs Act of 2010' affect Section 179 in a positive way for the 2012 tax year. Following are the highlights:

2012 Deduction Limit = $139,000
Section 179 Deduction limit after adjustment for inflation has increased to $139,000 (maximum allowance would have been only $25,000 prior to the new legislation).

2012 Limit on Capital Purchases = $560,000
Section 179 Threshold for total of equipment & software that can be purchased has increased to $560,000 (threshold would have been only $200,000 prior to the new legislation).

2012 Bonus Depreciation = 50%
The new law allows 50% “Bonus Depreciation” on qualified assets placed in service during 2012

Please Note:

Section 179 includes a ceiling that will reduce the deduction when various spending limits are reached. The amount available to be expensed is reduced dollar for dollar for the amount of qualifying capital expenditures in excess of the ceiling. Therefore, the 179 expensing is not available in 2012 if qualifying expenditures exceed $699,000 ($139,000 + $560,000).  In addition, Section 179 expense is limited to taxable income and cannot create a taxable loss for the taxpayer. 

Section 179 Deduction is available for most new and used capital equipment, and also includes certain software.

Bonus Depreciation can be taken on new equipment only (no used equipment, no software)

When applying these provisions, Section 179 is generally taken first, followed by Bonus Depreciation – unless the business has no taxable profit in 2012.

We have a  2012 easy to use calculator that will help you estimate your potential tax savings. Simply enter the purchase price of your equipment, and let the calculator take care of the rest.

It is important to note that you may not have to write a big check in 2012 to purchase your equipment.  You could claim the deductions and simply make small monthly payments to pay for the use of the equipment over time through a properly structured lease.   Moreover, the tax savings could be used to make some of the monthly payments thereby reducing the overall cost of ownership.

 

 

September 27, 2010

Small Business Jobs and Credit Act of 2010

President Obama signed the Small Business Jobs and Credit Act, which allows businesses to write-off 50 percent of the cost of depreciable property purchased or leased (including software) and placed in service during 2010--the 2011 write-off is 100%.  This provision is a temporary extension of the bonus depreciation provision included in both the 2008 and 2009 economic stimulus laws.  The new law also includes a provision that increases Section 179 expensing for two years by increasing the expense limitation from $250,000 to $500,000 and increasing the dollar-for-dollar phase-out threshold from $800,000 to $2 million for years 2010 and 2011.

We have a 2011 easy to use calculator that will help you estimate your potential tax savings. Simply enter the purchase price of your equipment, and let the calculator take care of the rest.

It is important to note that you may not have to write a big check in 2010 or 2011 to purchase your equipment.  You could claim the deductions and simply make small monthly payments to pay for the use of the equipment over time through a properly structured lease.   Moreover, the tax savings could be used to make some of the monthly payments thereby reducing the overall cost of ownership.

 

 

February 13, 2009

American Recovery and Reinvestment Act of 2009 has officially extended the Section 179 Deduction increases made available in the Economic Stimulus Act of 2008 through December 31, 2009

The Section 179 Deduction has been significantly enhanced by the Economic Stimulus Act of 2008, and now extended an additional year by the American Recovery and Reinvestment Act of 2009, giving businesses an incentive to invest in themselves by purchasing or leasing new equipment.

 

 

February 13, 2008

President Bush signed H.R. 5140, otherwise known as the Economic Stimulus Act of 2008. The Economic Stimulus Act immediately grabbed headlines because most Americans would receive a check for $600 from Uncle Sam. While the Economic Stimulus Act was a boon for consumers, there were significant benefits in the Economic Stimulus Act for businesses as well

The specific impact the Economic Stimulus Act has had on the Section 179 deduction is related to the dollar limits of the deduction. The previous dollar limits were a $125,000 limit on the deduction and the total amount of equipment purchased could not exceed $500,000. The Economic Stimulus Act raised these limits significantly. The new deduction limits are $250,000 on the deduction, and the total amount of equipment purchased cannot exceed $800,000.

 

 

February 08, 2008

Stimulus Package Offers
Equipment Purchase Incentives to Business

Congress approved a $168 billion bill to boost the economy, paving the way for businesses to write off equipment purchases made this year more quickly.

The following provides insights into the business tax and bonus depreciation provisions:

Business Tax Provisions:

Elective Expensing (Section 179). In lieu of depreciation, small business taxpayers may elect to expense the cost of qualified assets (property) they purchase in the year when the assets are placed in service, within certain limits. Under section 179, small business taxpayers are allowed to expense $125,000 (indexed for inflation), and the phase-out threshold is $500,000 (indexed for inflation). Currently in 2008, the expensing limit is $128,000 and the phase-out threshold is 510,000. The proposal increases the expensing limit to $250,000 and the phase-out to $800,000 for 2008. The proposal is effective for taxable year 2008. This proposal is estimated to cost $900 million in 2008 and $100 million over ten years.

Bonus Depreciation. Generally a trade or business must recover the cost of property over a predetermined period of years. This proposal will allow a trade or business to depreciate an additional 50 percent of the cost of an asset acquired and placed into service in 2008 in that year. The types of property eligible for bonus depreciation will be the same as those included in the previous depreciation packages: (1) tangible property that had a recovery period not exceeding 20 years; (2) purchased computer software; (3) water utility property; and (4) qualified leasehold improvement property. The bonus depreciation will be allowed under the alternative minimum tax (AMT). The proposal is effective for calendar year 2008 beginning after the date of first Committee action. This proposal is estimated to cost $43.9 billion in 2008 and $7.4 billion over ten years.

 

 

You should consult with your tax advisors to determine how you can use leasing to take advantage of the Section 179 tax savings this year.

 

 

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