MEDX

Both the 'Tax Relief Act of 2010' as well as the 'Jobs Act of 2010' that passed in late 2010 affected Section 179 in a positive way for this 2012 tax year. Following are the highlights for the 2012 tax year:

The 2012 Section 179 Deduction limit after adjustment for inflation has increased to $139,000 (maximum allowance would have been only $25,000 prior to the new legislation).

The 2012 Section 179 Deduction threshold for total amount of equipment that can be purchased has increased to $560,000 (threshold would have been only $200,000 prior to the new legislation).

The Section 179 Deduction is available for most new and used capital equipment, and also includes certain software.

The new law allows 50% “Bonus Depreciation” on qualified assets placed in service during 2012. However, this can be taken on new equipment only.

When applying these provisions, Section 179 is generally taken first, followed by Bonus Depreciation – unless the business has no taxable profit in 2012.