MDNA GOVERNMENT AFFAIRS TAX NEWS ALERT

Scoop your competition, by being the first to let your customers know that the American Taxpayer Relief Act, the deal that kept us from going off the "Fiscal Cliff," also brought back increased expensing limits for small businesses.

For the 2013 tax year, the Section 179 Expensing Limit has been raisedbackto $500,000, the increased level in effect in 2010 and 2011and is not reduced until the cost of section 179 property placed in service exceeds $2 Million.

H.R. 8: American Taxpayer Relief Act of 2012. Click this link todownload the 154-page Act (better known as the "Fiscal Crisis Bill") and go to 'SEC.315. Extension of Increased Expensing Limitations and Treatment of Certain Real Property as Section 179 Property.'

http://tax.cchgroup.com/downloads/files/pdfs/legislation/ATPR.pdf
 Click this link to read a Tax Briefing by CCH, a leading tax, accounting and audit information company.

What you should tell your customers:

• 2013 is a great year to buy and save on used machinery!
• 2013 Expense Deduction Limit has been raised to $500,000
  The American Taxpayer Relief Act reinstates the 2010-2011 year expensing limit of $500,000 through 2013 (Maximum allowance was slated to drop to $25,000 this year).
• 2013 Limit on Capital Purchases = $2 Million
  Section 179 Threshold for total of equipment & software that can be purchased has increased to $2 Million (threshold would have been only $500,000 prior to the new legislation).
• 2013-2014 Bonus Depreciation = 50%
  The new law allows 50% "Bonus Depreciation" on qualified assets placed in service during 2013 and 2014.

Please Note:

Section 179 Deduction applies to most new and used capital equipment, and also includes certain software.

Bonus Depreciation only applies to new equipment (no used equipment, no software)

When applying these provisions, Section 179 is generally taken first, followed by Bonus Depreciation - unless the business has no taxable profit in the given tax year.

                                           Sample Savings*

*Assuming a 35% tax qualifying purchase

This information does not constitute tax advice. Please check with your tax advisor on how this applies to your business.