by FitSmallBusiness.comThe Ultimate Guide

1 7 9Deduction 2013

Section

Section 179 deduction The

is one the biggest deduction available

to businesses.

Section 179 deduction The

for its ability to get a bigger

deduction for these types of vehicles.

It is often referred to as the

“SUV tax loophole” OR

“Hummer deduction”

business owners to deduct up to $500,000 of

qualifying purchases.

The “179 deduction”,

This deduction offers refers to Section 179 of the IRS tax code.

of the 179 deduction as

accelerated depreciation.

Think

to slowly deduct your equipment, material or improvement costs you can elect to depreciate most, or all, of it in the current year.

Instead of waiting,

5, 7, 15 years

To slowly deduct your equipment, material or improvement costs you can elect to depreciate most, or all, of it in the current year.

WhatQualifies?

• Vehicles• Storage facilities and some types of structures.• Machinery • Equipment Livestock

Qualifiers for these deductions:

The IRS calls such property “tangible” property, meaning that it is actual property that exists in a material form.

In the 2013 tax year,computer software

bought off the shelf may also be deducted.

At least 50% of the time, and be purchased in the current tax year.

One of the main requirements is that all the property must be used

in business.

However, if you use your car, for personal reasons also, you may deduct only the business percentage.

Vehicles are also eligible for a substantial deduction.

You would calculate the percentage of hours you use it for work-related purposes, and divide by the amount of time you use it for personal reasons

the usage is based on hours.

If you use your computerfor personal and business use,

179 Deduction

Reasonsto take the

large tax savings can help with

In a year, when business expenditures are high,

cash flow, lower costs, and help your business expand.

Because you deduct the entire amount of your purchase in the year you acquired it, you cannot keep depreciating the items in.

subsequent years.

A business should carefully consider:

• The future deductions

• Expected cash flow

• Whether this deduction would be beneficial.

Section 179Deduction

Section 179

LimitsDeduction

is $500,000.

For 2013 the

deduction limitFor The Section 179

Real property is limited to $250,000 of that limit.

is $500,000.

For 2013 the

deduction limitFor The Section 179

or all of the cost of equipment.

Additionallyyou can deduct part

If you bought a saw for

you can deduct the full amount or

$10,000,

part.

If you used $5,000 as a 179 deduction, the remaining $5,000 could be depreciated.

If you bought a saw for

you can deduct the full amount or

$10,000,

part.

dollar limit The

is subject to limits in the following circumstances:

dollar limit The

amount over $2,000,000 is subject to a reduction, which is reduced dollar for dollar.

Any 179 property

Qualified Business Enterprise Zones Qualify for an increase of $35,000. If

costs exceed $2,000,000 the increase is half the qualified zone property cost.

Sport Utility Vehicles have a limit of $25,000.

Disaster Assistance property

is increased by the smaller of $100,000 or the cost of the qualified section 179 Disaster Assistance property placed in service during the tax year.

Disaster Assistance property

also has an effect on limits. Filing status

Married Filing Jointly taxpayers are treated as one taxpayer in determining any reduction to the dollar limit, regardless of who purchased the property.

is beneficial for many small businesses,

TheSection 179 deduction

and can impact many purchases and decisions.

And Finally...

the process of To learn how to

running your businessvisit us at....

simplify

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