3 simple steps to IRS Section 179 Tax Deductions

Small business owners have until December 31, 2012 to take advantage of a generous IRS gift: The Section 179 Tax Deduction. If you own and operate a business in Contra Costa County or the San Francisco East Bay, here’s how it works:

When you purchase or finance business equipment that qualifies under the Section 179 Tax Deduction, you can write off up to $139,000 of the total cost. The only stipulation is that the equipment must be acquired and put into use on or before the last day of 2012. Here’s why and how you should take advanatge of these deductions this year, before it’s too late.

Unless Congress takes action, the current $139,000 deduction limit will drop all the way to $25,000 once the New Year begins. In addition, the first-year depreciation on new business equipment is scheduled to drop to zero from its current rate of 50%, and the cap on total capital equipment purchases is set to go from $560,000 to $200,000.

Here are the three simple steps you can take for your small business to take advantage of IRS rules for Section 179 Tax Deductions for purchase or lease of business equipment and manufacturing technology in 2012.

1. Prior to making your purchase, make sure you check the IRS Section 179 web page to see the different types of equipment that qualify.

2. Talk to your business accountant, as he or she is most likely well-informed with Section 179, and can let you know if the equipment you are interested in is eligible for the IRS deduction.

3. Lastly, the Section 179 Tax Deduction applies to both cash purchases and equipment financing, so you can choose the option that best suits your budget and equipment needs. No matter what choice you make, it’s the perfect holiday gift for your small business.