Tax Tip: Maximize Your Equipment Depreciation Deduction

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Depreciation 2
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

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.

 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.