What's the Buzz About Section 179 for 2013?
If Congress continues in its deadlocked ways, come New Year’s Day, people will probably quit talking about Section 179 and Bonus Depreciation. However, for now, you may still benefit from these popular and soon to expire expensing allowances.
The Section 179 expensing allowance, first established 1958, reduces the tax burden on small business owners by stimulating small business investment and simplifying tax accounting for smaller firms.
What will be different in 2013?
As it stands, come New Year’s Day the maximum Section 179 expensing allowance and investment limitation will drop from 125,000 and 500,000 to 25,000 and 200,000 respectively; levels not seen since the 2001/2002 tax years.
The Section 168(k) depreciation allowance, first passed in 2002, is another effective measure to encourage investment in plant and equipment. This provision, within certain limits, allows for 50% of qualifying property placed in service to be depreciated in the current tax year. Unless Congress takes decisive action this provision is scheduled to expire in it’s entirely.
Despite support in both the House and Senate for either retaining or enhancing these “tax extenders,” concerns over federal budget deficits and disagreements on how to manage our national debt have hindered Congress from passing legislation to either renew or extend these popular allowances...so you may want to act fast.
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