Deduction Limits
Section 179 can be very beneficial to your business, but there are limits. The 2009 Section 179 extended the amount of qualified property that can be expensed to $250,000. The limit of total amount of equipment purchased in 2009 is $800,000. Once that limit is reached, the deduction decreases dollar for dollar.
In 2009, businesses that exceed the $250,000 deduction limit can take a bonus depreciation of 50% on the amount that exceeds the limit. Read more about the bonus depreciation below.
2009 Deduction Limit: $250,000
2009 Total Amount of Equipment: $800,000
Bonus Deduction of 2009
The 2009 Section 179 offers a one-time “bonus depreciation” of 50% on qualifying assets. This is after the above deduction limit is reached. However, the bonus is in addition to regular first-year depreciation.
In other words, if you purchase or lease equipment that exceeds the $250,000 deduction threshold, you can take a bonus 50% depreciation on the rest (up to $800K).
Act Now!
To take advantage of the incentives and the substantial tax savings, your business equipment must be put in use by year-end. Please contact your tax advisor to learn about the specific impact to your business.
If you need advice on how to utilize Section 179 for your business, feel free to contact us at 800-604-4817 or advice@economicstimulusinfo.com.
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