Depreciation Bonus Information Clearinghouse
NEWS ALERT: Bipartisan Depreciation Bonus Bills Introduced in the House and Senate
Rep. Patrick Tiberi (R-Ohio) and Sen. Debbie Stabenow (D-Mich.) have introduced bipartisan legislation to extend the depreciation bonus through 2012 (H.R. 4196/S. 2240).
In addition to the extended opportunity for businesses to take advantage of the 100 percent depreciation bonus, the legislation offers other benefits including:
- Removing restrictions to allow more corporate Alternative Minimum Tax credits for capital reinvestment that would otherwise qualify for the depreciation bonus
- Allowing companies that use the "percentage of completion" accounting method to take advantage of the depreciation bonus
While there is a growing base of bipartisan support on Capitol Hill for extending the depreciation bonus, it is critical that you add your voice to those supporting this important investment incentive. Visit AEDAction.org to urge your lawmakers to co-sponsor this legislation.
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- Try the 2011 Depreciation Bonus Calculator HERE
- View the 2011 AED Depreciation Bonus brochure HERE. You can also customize this handy brochure with your company logo. Order your customized brochure now.
- Read "Temporary law can mean HUGE tax savings for 2011 equipment buyers," an article written by AED Vice President of Government Affairs Christian A. Klein HERE
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The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 provides 100 percent depreciation bonus for capital investments placed in service after September 8, 2010 through December 31, 2011. For equipment placed in service after December 31, 2011 and through December 31, 2012, the bill provides for 50 percent depreciation bonus. Note: The Small Business Jobs Act of 2010, which contained 50 percent depreciation bonus, still applies to purchases made between January 1, 2010 through September 7, 2010.
The new law also extends Sec. 179 expensing for taxable years beginning in 2012. In 2012, a taxpayer may expense up to $125,000 of the cost of qualifying property placed in service for the year (phase-out threshold of $500,000), indexed for inflation. Note: The Small Business Jobs Act, which increased Sec. 179 expensing levels to $500,000 (phase-out threshold amount is $2 million) for the taxable years beginning in 2010 and 2011, still applies.
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Depreciation Bonus At A Glance
- The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 provides 100 percent depreciation bonus for capital investments placed in service after September 8, 2010 through December 31, 2011. For equipment placed in service after December 31, 2011 and through December 31, 2012, the bill provides for 50 percent depreciation bonus.
- However, The Small Business Jobs Act of 2010, which contained 50 percent depreciation bonus, still applies to purchases made between January 1, 2010 through September 7, 2010.
- Depreciation bonus helps businesses that cut their tax bill buy new equipment.
- Applies, among other things, to purchases of tangible personal property (including construction, mining, forestry, and agricultural equipment) with a MACRS recovery period of 20 years or less
- Applies to new equipment only
- Allowed for both regular and alternative minimum tax purposes
- Discretionary - Taxpayer need not claim the depreciation bonus
Sec. 179 Expensing At A Glance
- The Small Business Jobs Act increased Sec. 179 expensing levels to $500,000 for 2010 and 2011
- The phase-out threshold amount is $2 million
- The new tax cut extension law also extends Sec. 179 expensing for taxable years beginning in 2012, at $125,000 and $500,000 respectively, indexed for inflation.
- New and used equipment is eligible for expensing
- Can be combined with depreciation bonus
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Keep checking our DepreciationBonus.org Web site for more information.
Please note that the information on this site is provided by the Associated Equipment Distributors as a public service to equipment purchasers. It should not be construed as tax advice or as a promise of potential tax savings or reduced tax liability.
For more information about the depreciation bonus, contact your tax professional or visit the Internal Revenue Service website.
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