According to the Machinery Dealers National Association, on Friday, Dec. 18, President Obama signed the $1.8 Spending and Tax Bill into law. Earlier on Friday, the Senate gave final congressional approval to the bill, which includes nearly $700 billion in tax breaks.
The new permanent Section 179 expensing limit allows a business to take a current year deduction of the full purchase amount up to $500,000 for assets under $2 million.
Original Equipment Cost: $500,000
New Potential Tax Savings: $175,000
Final Equipment Cost: $325,000
Cash Savings on
Equipment Purchase: $175,000
*Assuming a 35% tax qualifying purchase
This information does not constitute tax advice, please check with your tax advisor on how this applies to your business.