Tax Tip for 2012 – Depreciation

2012 business depreciation update

If you plan to buy equipment or other assets for your business this year, be aware that the limits on what you can immediately deduct have changed.

 For one thing, 100% bonus depreciation expired at the end of 2011. Bonus depreciation for 2012 is 50% of the cost of the property. Remember, too, that bonus depreciation applies only to new assets; used assets don’t qualify.

 Second, the maximum amount you can elect to expense under Section 179 decreases this year to $139,000. The $500,000 write-off ended December 31, 2011. To receive the full benefit of the Section 179 deduction, the total cost of all qualifying assets purchased in 2012 must be $560,000 or less. Your deduction may also be limited by the amount of your business income. Both new and used assets qualify for Section 179 expensing.

Congress may change these rules at any time. Before making business asset purchases this year, contact our office for the latest developments. 

This does seem likely to change so do contact us for the current status.


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