Bigger Section 179 Deduction

[PaulChristenson]

Good news for small-business owners: If your total equipment purchases didn't exceed $500,000 in 2007, you can take a full tax deduction of up to $125,000. (Last year's amounts were capped at $400,000 and $108,000, respectively.) "That's extra stuff that a small-business owner can buy and just deduct immediately," says Jim Smith, accountant and chairman of the Texas Society of CPAs. Just make sure that all the equipment is for business purposes and not personal use. Section 179 was passed in May 2007 and will be in effect through 2010.

For more small business tax tips, read the story here.


Doug...As long as you have the jobs lined up, you can get your BIG TLB now, because you are going to deduct the whole wad this year...

 

[Dougster]

Doug...As long as you have the jobs lined up, you can get your BIG TLB now, because you are going to deduct the whole wad this year...

I know well of Section 179 deductions and was able to use them to good advantage (under the existing rules/limits) on my 2006 tax return. Unfortunately, the business is showing a net loss for this past year (2007) so Section 179 buys me nothing other than an ability to carry forward 2007's equipment purchases and apply them against 2008 business income. This would appear to be a good thing at first glance since regular depreciation of that new (2007) equipment buys me nothing for tax year 2007 because of the size of my loss.

The problem is that I need and intend to buy one or more significant new items of equipment in 2008... and there is a very good chance that those purchases, together with last year's purchases, will again exceed my business income for 2008.

Bottom line: Without a good handle on what my 2008 business income might be, it is very hard to speculate on the choice of regular depreciation vs. Section 179 at this time.

Dougster

 

[Markpeter77]

Good news for small-business owners: If your total equipment purchases didn't exceed $500,000 in 2007, you can take a full tax deduction of up to $125,000. (Last year's amounts were capped at $400,000 and $108,000, respectively.) "That's extra stuff that a small-business owner can buy and just deduct immediately," says Jim Smith, accountant and chairman of the Texas Society of CPAs. Just make sure that all the equipment is for business purposes and not personal use. Section 179 was passed in May 2007 and will be in effect through 2010.

For more small business tax tips, read the story here.


Doug...As long as you have the jobs lined up, you can get your BIG TLB now, because you are going to deduct the whole wad this year...

That's a nice post. Thank you for sharing.Many people think tax laws are complicated but section 179 deduction helps a lot for tax deductions. Business owners often benefit greatly from Section 179 tax deductions.