The following information about the tax benefits available in 2012 was shared with MSL from Standard Horizon:
With legislation pending that will decrease these tax savings for 2013 and beyond, you have an even better reason to invest in new technology in 2012!
What is Section 179 and Bonus Depreciation?
Section 179 of the IRS Tax Code allows a business to deduct, for the current tax year, the full purchase price of financed or leased equipment within the specified dollar limits rather than depreciate these costs over time. Nearly every Standard Horizon post-press product qualifies under this program. Stimulus acts over the past several years have generously increased the limits of the Section 179 Deduction and also added a one-time “Bonus Depreciation” on equipment that exceeded the deduction limit. The total deduction for 2012 is $125,000 (not adjusted for inflation) when the total amount of equipment purchased does not exceed $500,000. The Section 179 Deduction begins to phase out when capital expenditures exceed $500,000. In addition to any property that qualifies for Section 179 expensing, companies may also take advantage of a special Bonus Depreciation of 50% in 2012 for any amount over the Section 179 Deduction. This is a large incentive for businesses of all sizes, and will result in a substantial boost to their bottom line increasing the ROI of their equipment purchase. To qualify for both the deduction and bonus depreciation, the equipment must be purchased or leased and placed into service before December 31, 2012. To determine potential tax savings, click here for the on-line calculator.
Why Purchase in 2012?
The maximum deduction and phase-out threshold are set to revert back to the original amounts of $25,000 and $200,000 respectively beginning in 2013 and beyond. Companies would be wise to take advantage of Section 179 now before the enhanced tax deductions and bonus depreciations expire. Although proposals have been presented to extend Section 179 expensing, the likelihood of agreement in this election year is uncertain – and, in the absence of any new tax bills, the Section 179 Deduction would return to the normal amounts stated above.
If you are thinking about buying equipment, then this is definitely the year to do it. The government will give them a very generous tax deduction in 2012 – a tax deduction which is scheduled to be drastically reduced in 2013.
Don’t forget to sign-up for you VIP live demo at Graph Expo 2012 with MSL and Standard Horizon, Booth 1244.