WHAT IS SECTION 179 AND BONUS DEPRECIATION?

Section 179 and Bonus Depreciation allow businesses to accelerate the depreciation of qualified equipment against their taxable income. 

WHO CAN USE SECTION 179?

Section 179 is a true small to medium business tax deduction.  The Section 179 Deduction is currently $1,250,000.  This amount begins to phase out once total equipment purchases exceed $3,130,000.  

WHAT ABOUT BONUS DEPRECIATION?

Bonus Depreciation is currently 40% and is in addition to Section 179.

HOW DO THEY AFFECT MY TAXES?

Here’s an example :

Equipment Cost:                                                      $150,000
 

1st Year Section 179 Write Off:                                $150,000
 

Bonus Depreciation :                                               $          0
 

Total 1st Year Deduction:                                        $150,000
 

Assuming Tax Rate of 35%:                                       x    21%

Estimated Tax Savings:                                             $31,500