How can a business take advantage of the Section 179 deduction?
This is a special deduction that allows businesses to immediately write off expenditures that they make for capital items. Under normal procedures, you would have to capitalize them on your books and take depreciation, which means write them off over a number of years. Instead, you can now purchase up to $100,000 of equipment, furniture, fixtures or computers and immediately write them off. This law has been around for awhile, but the new law allows it to continue at the $100,000 level, adjusted for inflation, instead of dropping back to $25,000, which it was scheduled to do in 2008. This is indexed, so in 2006 the amount that can be deducted is $108,000 and, presumably, that will go up for the next few years. Why were the changes to the tax law made? This is part of a comprehensive bill that was started back in 2005 by Congress. A lot of things that should have been included in the bill got left out because they couldn’t agree. There are expectations that there might be some stand-alo
Related Questions
- Can I take a Section 179 deduction on my individual income tax return in connection with my Schedule C business if my Schedule C is showing a loss?
- Does the geographic area my business operates in make any difference in the Section 179 Deduction?
- What is the purchase limitation for section 179 deduction on federal taxes?
