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New Bonus Depreciation for Machines Placed into Service in 2011 or 2012

NEW TAX INCENTIVES In an unprecedented move, Congress is allowing businesses to write off the entire cost of equipment in the year of purchase, rather than spreading the tax deductions over several years under ordinary depreciation.  To qualify, the equipment must be placed in service by December 31, 2011.  Order now while machines are in stock at favorable pricing, to ensure 2011 delivery!   HOW IT WORKS This “bonus” depreciation, as it’s called, is different from the Section 179 expensing election that allows businesses a partial write off of their equipment purchases, subject to certain income and purchase restrictions.  Unlike Section 179, there is no limit on bonus depreciation.  If you wait until 2012, the bonus depreciation rate drops to 50%, and then expires on January 1, 2013.   Under the rules, the 100% first-year bonus depreciation allows the taxpayer to deduct the full price of new equipment in the current year, which can result in significant tax savings if you are projecting a profit in 2011.  Also, businesses that are not profitable in 2011 can use 100% bonus depreciation and carry-forward the loss to future profitable years. Unlike ordinary depreciation deductions, which must be pro-rated to reflect that property has been in service for only a portion of the year, the 100% bonus deduction is allowed in full the year property is placed in service even if that date is the last day of the year.

Click here for an example of tax savings with the Bonus Depreciation Program for 2011 and 2012

Click here to calculate your tax savings

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