WHAT IS SECTION 179?

19 Oct, 2016

This tax incentive encourages businesses to invest in new or leased equipment (up to a $500,000 deduction) to enhance their own productivity and boost the U.S. economy. Hurry, because this incentive is only available through December 31! Contact us for an equipment quotation today and see your personal savings!

EXAMPLE:

Cost of Equipment	$50,000
Section 179 Deduction	$50,000
Current Year Tax Savings on Purchase (Assuming a 35% tax bracket)	$17,500
Equipment Cost Less Tax Savings	$32,500

BONUS DEPRECIATION – Allows 50% depreciation for new qualified property placed in service within that calendar year.

EXAMPLE:

Cost of Equipment	$50,000
Bonus Depreciation ($50,000 x 50%)	$25,000
Normal First Year Depreciation (based upon MACRS 5 year property & calculated on remaining basis after bonus depreciation ($25,000 x 20%)	$5,000
Total First Year Depreciation Deduction	$30,000
Current Year Tax Savings on Purchase (Assuming a 35% tax bracket)	$10,500
Equipment Cost Less Tax Savings	$39,500

The above examples are based upon U.S. federal guidelines and eligibility and may not be applicable in your state. Limitations and exclusions may apply. Please consult a U.S. tax advisor to determine whether one and/or both of these deductions may benefit your business.