For the upcoming 2014 tax year, Section 179 has been restored to its original limits of $25,000 plus an adjustment for inflation.Congress has all year to make adjustments to this like they did last year.
Simplifying Section 179 Tax Saving Information:
What is Bonus Depreciation?
Bonus Depreciation is useful to businesses spending more than $560,000.00 in 2013; also businesses with a net loss in 2013 qualify to carry-forward the Bonus Depreciation to a future year. The most important difference is Bonus Depreciation covers new equipment & software only. Section 179 is generally taken first, followed by Bonus Depreciation. Business can claim first-year bonus depreciation equal to 50% of the cost of most new (not used) equipment and software placed in service by December 31 of this year. The amount of equipment purchased and or financed cannot exceed $2,000,000 for 2013.
What Happens to Section 179 at the End of 2013?
The current deduction limit of $560,000.00 is scheduled to drop to $25,000 beginning January 1, 2014.
What about Bonus Depreciation?
Bonus depreciation has spiraled downward over the last few years. In 2011, it was 100% and in 2012 it dropped to 50%. It will drop to 0% starting January 1, 2014. The current cap on capital equipment purchases is $2,000,000.00 and will decrease to $200,000.00 in 2014.
*This information does not assume you are eligible to take advantage of the IRS Section 179 depreciation. Please consult your tax advisor or accountant for additional information. This flyer is intended for informational purposes only and not as Tax advice or consultation. Please see www.irs.gov for complete details.
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We also have the new Section 179 information. Email me if you’re interested email firstname.lastname@example.org