When it comes to our business technology we all want the latest and greatest available. Here are two important reasons why you should take action now before the clock runs out on 2011.
• Last chance for 100 percent bonus depreciation. Without any legislative action, the 100 percent first year bonus depreciation allowance will generally not apply to any qualified property placed in service after December 31, 2011. Taxpayers planning to place eligible depreciable property in service in the next year should consider placing the property in service in 2011 as this attractive incentive drops to 50 percent on January 1, 2012. Keep in mind that this bonus depreciation is allowed in full for eligible property, regardless of the length of time the asset is in service during 2011. No pro-ration is required for assets placed in service at the end of the year.
•Maximize the generous Section 179 expensing deduction. For assets placed in service during the year, taxpayers can deduct as an expense, rather than depreciate over the useful life, the cost of new or used tangible personal property placed in service in the taxpayer’s trade or business, up to a specified limit. For tax years beginning in 2010 and 2011, the dollar amount of the expense limitation is $500,000. This limitation will drop to $125,000, indexed for inflation, for tax years beginning in 2012, if Congress takes no action.
If you have questions about the applicability of either of these tax provisions or others that may apply to you and your business feel free to contact me directly.
Peter Tarantino CPA
Tarantino & Co CPAs