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Section 179 At A Glance

2013 and 2012 Deduction Limit = $500,000

This is good on new and 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.





What is the Section 179 Deduction? 
         Essentially, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income.


What's the difference between Section
179 and Bonus Depreciation?

         The most important difference is both new and used equipment qualify for the Section 179 Deduction (as long as the used equipment is "new to you"), while Bonus Depreciation covers new equipment only. Bonus Depreciation is useful to very large businesses spending more than $2,000,000 on new capital equipment in 2013. Also, businesses with a net loss in 2013 qualify to deduct some of the cost of new equipment and carry-forward the loss.



Who Qualifies for Section 179?

      All businesses that purchase, finance, and/or lease less than $2,000,000 in new or used business equipment during tax year 2013 should qualify for the Section 179 Deduction.



For Full Details on Section 179 

Click Here.