Thursday, December 6, 2012

The Small Business Jobs & Credit Act was Extended for 2012!

The Federal Government has once again extended the ‘Small Business Jobs and Credit Act of 2010’ which means it is not too late to take advantage of Section 179 Deductions!

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 purchased or financed during the 2012 tax year from their gross income.

Why does Section 179 exist? 

To help motivate the American economy, the US Government developed incentives to encourage businesses to invest in themselves.  Section 179 allows businesses to write off the full purchase price of qualifying equipment all at once, as opposed to a little at a time through depreciation.

Are there Limits of Section 179? 

Section 179 does come with limits - there are caps to the total amount written off $139,000, and limits to the total amount of the equipment purchased $560,000.

After passage of the 'Tax Relief Act of 2010', large businesses that exceed the threshold of $560,000 in capital expenditure can take a Bonus Depreciation of 50% on the amount that exceeds the above limit.

What does this mean to you?  

All businesses that purchase, finance, and/or lease less than $560,000 in business equipment during tax year 2012 are subject to qualify for the Section 179 Deduction.

Therefore, if you invest in a Trotec Laser system, you may be able to deduct the full purchase price from your taxable income!

Consult an Expert! 

As always, Trotec highly recommends that you consult the IRS or your Tax Advisor for full program details, qualifications, and limitations that may apply before investing in and depending on this deduction.

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