Extended through December 31, 2010
The Section 179 Tax Deduction states that when you buy or lease qualifying equipment you can take a full tax deduction on it this year up to $250,000. The American Recovery and Reinvestment Act enabled buyers to continue their savings from 2008, an additional $125,000 over 2007. This equipment must be in working order by December 31, 2010.
Bonus First Year Depreciation
Section 179 offers a one-time "bonus first year depreciation" of 50% on qualifying equipment. This is after the $250,000 deduction limit is reached.
Example:
| Cost of Equipment | $100,000 |
| Section 179 Deduction | $100,000 |
| 50% Bonus Depreciation Deduction (Any remaining amount above $250,000) | $0 |
| Regular First Year Depreciation Deduction | $0 |
| Total First Year Deduction | $100,000 |
| Cash Savings on your Equipment Purchase | $35,000 |
| Lowered Cost of Equipment After Tax Savings | $65,000 |
**This does not constitute tax or legal advice. Consult your accountant or tax advisor regarding Section 179 Capital Investment Deduction.