Section 179 is better than ever in 2009. That's because the new, higher limits (and bonus 50% depreciation) that were first introduced in 2008 have been extended for 2009. This means the limits are almost double from previous (pre 2008) years. This can signify a substantial tax savings for your business. In fact, coupled with 2009's low interest rates, the money saved can be especially attractive to your bottom line.
How attractive? Use our 2009 Section 179 Allowance Calculator below to see how much you can save on new equipment purchases in 2009.
In 2009, Section 179 will allow you to deduct from your tax liability the full purchase price of equipment purchases (up to $250,000). It also allows for a first-year 50% bonus depreciation for any over-limit equipment.
This means substantial, immediate tax relief for your business, and makes financing needed equipment a smart financial move.
Look good? Well, they can look even better with the right equipment financing, especially since interest rates have fallen. Here at Crest Capital, we can structure an Equipment Lease or Equipment Financing Loan that allows you to take advantage of the generous deduction limits that Tax Code Section 179 affords you. And if you buy more than the allowed deduction limit, you can depreciate the excess – first with the "bonus" 50% depreciation, and then on the normal depreciation schedule for that particular asset.
And again, in most cases, your tax savings will actually exceed your first year's payments on the equipment!
Contact Crest Capital for a free Equipment Lease Consultation, or read on to learn more about Section 179.
Section 179 allows small and medium sized businesses to deduct the full amount of the purchase price of equipment (up to $250,000). This includes machinery, many vehicles, computers and software, office machines and furnishings, and other tangible equipment. Essentially, the only caveat is the equipment needs to be purchased and put into use during the 2009 calendar year.
Last year, Section 179 got a major facelift from the Economic Stimulus Act of 2008. The deduction limits were raised to $250,000 (almost double of previous years), and a "bonus" first year depreciation of 50% was allowed on purchases that exceeded the limit. In 2009, these new, higher limits were kept. This is a definite boost to small and medium sized businesses as they navigate 2009's economic climate.
Section 179 is a key incentive in regards to business spending. This is because when combined with equipment financing or Capital Leases (also known as Non-Tax Leases), Section 179 can actually make buying new equipment profitable for the tax year. This is because the tax savings often exceed the first year's payments (quite common, actually.)
Obviously, there are limits in regards to Section 179. The big one is the total cost of the equipment deducted cannot exceed the total amount of taxable income. This means you cannot post big deductions while showing no income. Also, make sure to check your local state tax laws for equipment purchases.
In regards to types of property, most business equipment qualifies for the Section 179 deduction, including:
In simple terms, almost all "movable" assets qualify, and permanent structures do not (however, this also means that certain "permanently installed" machines may not qualify).
In regards to new/used equipment, the equipment need not be new - even used equipment/vehicles can qualify if they are new to you (however, they have to be truly new to.
You must act now to take advantage of these new, substantial incentives. Contact Crest Capital for a free consultation.
US Tax Code Section 179 is an equipment expense deduction provided for medium-sized and small businesses that elect to treat the purchase of qualifying property as an expense rather than a capital expenditure.
The Section 179 election, which is made on Form 4562, is for the calendar tax year the prop- erty was both purchased and placed into service (Jan 01 – Dec 31). For further details re- garding Section 179, contact your local tax advisor or visit www.irs.gov.
Click here for the 2008 Section 179 allowance calculator and information pertaining to this year.
Click here for the 2007 Section 179 allowance calculator and information pertaining to last year.
2009: These higher Section 179 limits have been extended for 2009. However, there is no guarantee they will be renewed in future years. If you want to take advantage of Section 179, the time to act is right now!
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