Section 179 Tax Relief From Depreciation Rules

Section 179 Tax Relief From Depreciation Rules



Section 179 – Tax Relief From Depreciation Rules
Depreciation .​
For business owners,​ this word is​ the​ one most likely to​ inspire headaches and fits of​ cussing .​
The expanded provisions of​ Section 179 are just the​ medicine you​ need to​ cure the​ depreciation blues.
Depreciation
Traditionally,​ if​ your business property had a​ life of​ more than one year,​ the​ cost had to​ be deducted over several tax years .​
The number of​ years depended on​ the​ characteristics of​ the​ property,​ which made depreciation the​ flag-bearing example of​ the​ complexities of​ the​ tax code .​
Shockingly,​ the​ federal government has provided substantial relief to​ business owners.
Section 179 of​ the​ Internal Revenue Code has been dramatically expanded to​ the​ benefit of​ businesses,​ particularly small ones .​
This code allows businesses to​ completely deduct the​ cost of​ tangible property in​ the​ year of​ purchase .​
The tax relief comes from the​ expansion of​ the​ total amount that can be deducted in​ one year.
Huge Deduction Increase
As part of​ the​ Job Growth and Reconciliation Act of​ 2003,​ the​ one-year deduction amount was increased from $25,​000 to​ $100,​000 .​
The 100,​000 figure will be adjusted for inflation each year,​ which means it​ will continue to​ increase .​
This is​ very good news.
What Property Qualifies?
You can deduct the​ cost of​ the​ following property under Section 179:
1 .​
Machinery and equipment
2 .​
Furniture and fixtures
3 .​
Computer software.
You must elect Section 179 .​
It is​ not automatically given to​ you​ .​
Simply fill out IRS Form 4562 and attach to​ the​ returns for the​ business.
In Closing
As shocking as​ this will sound,​ the​ government should be applauded for expanding Section 179 .​
Small businesses are burdened by too many regulations and mandatory costs .​
The expansion of​ Section 179 is​ a​ nice piece of​ tax relief legislation .​
Let’s hope more is​ on​ the​ way.




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