The
American Taxpayer Relief Act that finally passed this month had two major
changes that resulted in big tax savings for small businesses that invest in
equipment.
IRS
Code Section 179 write-offs: Your small business can take a first-year
deduction of up to $500,000 of the cost of qualified property placed in service
during 2013 and retroactively to January 1, 2012. Qualifying property is most non-real estate
related property. Check with your tax
advisor for a complete list. The Section
179 deduction is phased out once you buy more than $2 million of equipment
during the year.
Bonus
depreciation:
In addition to other depreciation
deductions, a business can claim a 50 percent bonus depreciation for qualified
new (not used) property placed in service for 2012 and 2013. The definition of “qualified property”
includes property with a cost recovery period of 20 years or less, qualified
leasehold improvements, certain computer software, and water utility property.
Like any good CPA, I need to add a
disclaimer: Unfortunately, it is
impossible to offer comprehensive tax info over the Internet, no matter how
well-researched or written. And remember,
I love my readers, but having me bookmarked on your computer doesn’t make you a
client: Before relying on any
information given on this site, contact a tax professional to discuss your
particular situation.