Don’t Forget about these 2012 Capital Equipment Tax Incentives

Section 179 and Bonus Depreciation tax breaksThere’s good news and bad news about capital equipment tax incentives and deductions in 2012. First, the bad news really isn’t all that bad, and there’s still plenty of good news under what’s called Section 179 Expensing and Bonus Depreciation.

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This year, the Section 179 Deduction limit is up to $139,000. Last year, the limit was up to a whopping $500,000. Still, this year’s limit is a decent amount for deducting the cost of printers, laminators and other capital equipment, and most is likely below the limit for the majority of print shops’ capital equipment investments.

Under Section 179, business owners who purchase capital equipment for use in their business may be able to deduct the total cost of the equipment in a single tax year rather than depreciating it over a number of years. For instance, assuming a 34% tax rate, if you were to purchase a $30,000 printer, the tax savings on the Section 179 deduction would be $10,200. The cost of the equipment, net of tax savings is $19,800.

Under Bonus Depreciation, this year’s provision allows for an additional first-year depreciation deduction for capital investments placed in service during 2012 equal to 50 percent of the adjusted basis of the qualified property (last year it was 100 percent).

Once again, anything is better than nothing and these provisions are sure to help with your 2012 taxes and bring down your cost of ownership relating to capital equipment. Be sure to consult your tax advisor to determine which of these tax-planning tips can provide the best benefit for you and your business. For more information, FAQs and to calculate Section 179 deductions, go to