Don’t miss your opportunity to cash in on the Section 179 Deduction.
Section 179 of the IRS tax code allows businesses to deduct up to the full purchase price of qualifying equipment and/or software purchased or financed during the 2012 tax year. That means that if you buy or lease a piece of qualifying equipment, you may be able to deduct the full purchase price from your company’s gross income. This incentive was created by theUnited Statesgovernment to encourage businesses to buy equipment and invest in their own companies.
The Section 179 Deduction works like this:
Typically, when a business purchases or leases qualified equipment, the expense is written off a little at a time through depreciation. For example; if a company spends $50,000 on a machine, it gets to write off $10,000 a year for five years. While it is true that this is better than no write off at all, most business owners would really prefer to write off the entire equipment purchase price the year they buy it.
In fact, if a business could write off the entire amount, they might add more equipment this year instead of waiting over the next few years. That’s the whole purpose behind Section 179 – to motivate American businesses to move the economy in a positive direction. For most small businesses, (those purchasing equipment, software and vehicles totaling less than $139,000 in 2012), the entire cost can be written-off on their 2012 tax return.
A new MetFin Shotblast System will not only create a more productive operation, a system purchased in 2012 will also provide substantial tax savings.
Limits of Section 179:
~ Cap to the total amount written off ($139,000 in 2012)
~ Total amount of the equipment purchased ($560,000 in 2012)
~ Purchase/lease must be made and placed into service between January 1 2012 and December 31, 2012.
After passage of the Tax Relief Act of 2010, large businesses that exceed the threshold of $560,000 in capital expenditures can take a Bonus Depreciation of 50% on the amount that exceeds the above limit.
Who Qualifies for Section 179?
All businesses that purchase, finance, and/or lease less than $560,000 in new or used business equipment during tax year 2012 should qualify for the Section 179 deduction. If a business is unprofitable in 2012, and has no taxable income to deduct the purchase from, that business can elect to use the 50% Bonus Depreciation option and carry-forward the balance to a year when the business is profitable.
The Section 179 deduction begins to phase out if more than $560,000 of equipment is purchased – in fact, the deduction decreases on a dollar for dollar scale after that, making Section 179 a deduction particularly beneficial to small and medium-sized businesses. However, as noted above, large businesses can expense all qualifying capital expenditures with the 50% Bonus Depreciation for the 2012 tax year.
Take advantage of these exceptional 2012 tax benefits before they end or change in 2013 by making your purchase of a MetFin Shotblast System now! We can provide financing or leasing options.
Disclaimer: Please speak to your tax advisor or accountant for more information and eligibility of tax benefits. Tax laws are subject to change, applications are dependent on each company’s circumstances, information provided is for general guidance and not intended as specific tax or accounting advice.
Information for this article was obtained from http://www.section179.org