Section 179 Deduction Tax Break Update

The Section 179 deduction allows businesses to deduct the full purchase price of qualifying asset additions during a tax year, encouraging businesses to buy equipment and invest in themselves. Thanks to the recent fiscal cliff legislation, several taxpayer-friendly changes have been applied to the Section 179 rules.

• More Generous Deduction Limits. Certain 2010 and 2011 limits were restored for tax years 2012 and 2013, enabling more medium-sized businesses to claim tax-saving Section 179 deductions.
• Other Favorable Rules Extended. Several temporary liberalizations were extended in the Section 179 rules through the 2013 tax year.
• Section 179 Deductions for Qualified Real Property Costs. An extension through 2013 was implemented for the 2010 and 2011 provision allowing businesses to claim deductions for qualified real property costs.

Favorable Section 179 rules can be a big tax-saver for eligible small and medium-sized businesses. However, in addition to the favorable legislation, there are still a number of tax-law restrictions that exist.

The Weaver e-newsletter article Update on the Section 179 Deduction Tax Break outlines tax-friendly Section 179 changes further in depth. Additionally, the full scope of Section 179 can be reviewed on the Section 179 website.