If you’re working with older technology equipment or have been holding off on that next software upgrade to conserve cash, now may be the best time to reconsider those purchases and still save money.
Right now, the U.S. government is offering several income tax incentives for small businesses on personal property (such as computer equipment, furniture and fixtures with multi-year value).
Internal Revenue Code Section 179 allows for $139,000 to be fully deducted from 2012 income rather than being depreciated over several years, total spending must not exceed $560,000. This special expense election is good through the end of 2012. Unless extended by Congress, the expense amount gets reduced to $25,000 in 2013.
In addition to the Section 179 deduction, there is another special deduction available in 2012. You can take 50% bonus depreciation for qualifying assets that are purchased and placed in service in 2012. Unless Congress acts to extend the 50% bonus depreciation, there will be no bonus depreciation for assets that are purchased and placed into service after 2012.
The Bottom Line?
If you are considering a major technology or other equipment purchase in the near future, you should act soon to take advantage of what is available now, before it’s too late.