Act Fast – Expanded Section 179 and Bonus Depreciation Deductions are Ending in 2013

If you are contemplating purchasing computer equipment or improving your IT infrastructure in the coming months, you might want to act before the end of 2013.

The American Taxpayer Relief Act (ATRA) provides increased Section 179 and bonus depreciation deductions for qualifying  acquisitions only through the end of 2013.

Items that can be capitalized under the final regs can be partially or entirely deducted now if you act before year-end.

Section 179 allows you to write off up to $500,000 of qualified capital expenditures in 2013, subject to a dollar-for-dollar phaseout once these expenditures exceed $2 million.

In 2014, section 179 will be reduced to an expensing limit of $25,000, and bonus depreciation will be eliminated unless Congress acts to extend the provisions.

If the phaseout provision limits your Section 179 deduction, you may still be eligible for 50 percent bonus depreciation on qualifying new asset purchases above the $2 million cap.

Contact your tax adviser to determine whether Section 179 and/or bonus depreciation make sense for your business.

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