TAX INCENTIVES
for Equipment Purchases

Tax incentives for manufacturing companies just went up!

2012 Deduction Limit = $139,000
This is good on new and used equipment, as well as off-the-shelf software.

2012 Limit on equipment purchases = $560,000
This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced.

2012 Bonus Depreciation 50% (Only available for new equipment purchases

Note – Smaller manufacturing companies intending to maximize tax write-offs and acquiring less than $560,000 in equipment in 2012 would typically only utilize the Section 179 deduction and not the bonus depreciation.

Tax laws are subject to change at any time and their application is highly dependent upon the unique facts and circumstances of any particular taxpayer.  The information in this page is offered as general guidance and is not intended as specific legal, tax or accounting advice.  These calculations are only estimates and everyone's tax situation is different. Always check with your accountant to confirm eligibility for tax benefits.


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Snapshot View

Equipment Cost $1,000,000
Section 179 Expense $500,000
50% Bonus Depreciation $250,000
MACRS Depreciation on Balance $35,715
Total 1st Year Deduction $785,715

 

This example presumes that the mid-quarter convention does not apply.  
Everyone's tax situation is different and you should always consult with your tax professional.

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