Section 179 & Special Bonus Depreciation

Section 179 Expensing and the 50% Bonus Depreciation Allowance has made 2009 a great year to obtain new equipment for your business.

The same one year 50% depreciation tax break that US Capital Equipment purchasers enjoyed in 2008 has been extended throughout 2009 by the recently passed 2009 American Recovery and Reinvestment Act (ARRA).

Section 179 Expensing

A business which qualifies may write off the full purchase price of equipment and machinery up to $250,000 in year 2009.

Tax Code Sect. 179 is treated as an expense deduction for those that elect this deduction rather than writing off the equipment as a capital expense.

To qualify the equipment and machinery must have been purchased and placed in service after December 31, 2008 and prior to January 1, 2010 to enjoy the Sect. 179 expensing.

50% Special Bonus Depreciation Expense

The first year special bonus depreciation is for tangible property depreciated under the Modified Accelerated Cost Recovery System (MACRS) with a recovery period of 20 years or less. Most equipment and machinery qualify under this deprecation method.

The first year 50% additional bonus depreciation allows an additional deduction of 50% of the equipment or machinery’s depreciable basis after any Sect. 179 deduction (above $250,000) and prior to figuring your regular depreciation deduction.

To qualify the equipment and machinery must have been purchased and placed in service after December 31, 2008 and prior to January 1, 2010 to enjoy the 50% special bonus depreciation expense.

The new Tax Law favors a Non-Tax or Capital Lease – the type of Equipment Lease we recommend over a traditional True Lease.

For details contact your tax professional or visit the Internal Revenue Service website at www.irs.gov or go to www.depreciationbonus.org

Sect. 179 & Depreciation Calculator

Application - Section 179 & Bonus Depreciation