Depreciation and the Secton 179 Deduction

by Mike R. Gohde, CPA, PFS

Dear clients and friends,

If you are planning on buying business assets such as computers, software, office equipment or other tangible business property, you may want to consider purchasing before year end to take advantage of some potentially expiring deductions.

For 2012 the maximum 179 deduction is 139,000. Next year the limit is scheduled to decrease to around $25,000. The 50% bonus depreciation will expire at the end of this year. So for 2012 you can deduct $139,000 of new or used property plus 50% of the cost of new property. The 179 deduction is limited to income from business but may be carried forward. Eligible purchases for Section 179 are reduced once you reach the $560,000 cap on eligible property.

Please bear in mind, that as with most expiring tax laws, there is a chance they will be extended or even enhanced.

This is a very brief overview of these deductions, please consult your tax professional or give us a call if you have any questions.

Very truly yours,

Michael R. Gohde, CPA, PFS
Daniel A. Kosmatka ,CPA, PFS, CFF
Dennis W. Donnelly, CPA, PFS