Tax Break 2011

Depreciation Bonus Website

Your one-stop web clearinghouse for information about capital investment incentives and the Small Business Jobs Act.

Sponsored by:

Download the Tax
Incentive Brochure
(PDF)

Read Full Details
at Bobcat's
Tax Break Website

Try Bobcat's Handy
2011 Depreciation
Calculator

The Section 179 Deduction and Bonus Depreciation has been significantly enhanced for the tax year 2011 - giving businesses an incentive to invest in themselves by purchasing, financing or leasing new equipment.

A 100% bonus depreciation deduction is included in the "Small Business Jobs & Credit Act" for qualified new equipment acquired and placed in service during 2011. The "Tax Relief Act" extends and expands the Bonus Depreciation available to businesses spending more than $2 million on capital equipment to write off 100% of the cost.

Quite simply, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment purchased, leased or financed during the tax year up to $500,000. It is an incentive created by the Federal Government to encourage businesses to invest in equipment.

• The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 provides 100 percent depreciation bonus for capital investments placed in service after September 8, 2010 through December 31, 2011. For equipment placed in service after December 31, 2011 and through December 31, 2012, the bill provides for 50 percent depreciation bonus.
• However, The Small Business Jobs Act of 2010, which contained 50 percent depreciation bonus, still applies to purchases made between January 1, 2010 through September 7, 2010.
• Depreciation bonus helps businesses that cut their tax bill buy new equipment.
• Applies, among other things, to purchases of tangible personal property (including construction, mining, forestry, and agricultural equipment) with a MACRS recovery period of 20 years or less.
• Applies to new equipment only
• Allowed for both regular and alternative minimum tax purposes
• Discretionary - Taxpayer need not claim the depreciation bonus

• The Small Business Jobs Act increased Sec. 179 expensing levels to $500,000 for 2010 and 2011.
• The phase-out threshold amount is $2 million.
• The new tax cut extension law also extends Sec. 179 expensing for taxable years beginning in 2012, at $125,000 and $500,000 respectively, indexed for inflation.
• New and used equipment is eligible for expensing.
• Can be combined with depreciation bonus.