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Tax at a Glance – Section 179

Essentially: Section 179 allows businesses to deduct the full purchase price of qualifying equipment & software purchased or financed during the tax year.

2013 and 2012 Deduction Limit = $500,000

-This is good on new & used equipment, as well as off-the-shelf software.

2013 and 2012 Limit on equipment purchases = $2,000,000

-This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced.

Bonus Depreciation = 50%

-This is taken after the $2 million limit in capital equipment purchases is reached. Note: Bonus Depreciation is available for new equipment only. Bonus Depreciation can also be taken by businesses that will have net operating losses in 2013.

To figure out your own Tax Benefit, use the ILS Tax Calculator

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