Today’s blog post was written by our special guest blogger, Lee Ashcroft – Senior Account Executive from Crest Capital.
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NEW this year (2012) qualified woodworking machinery purchases up to $139,000 are 100% deductible, and equipment purchases above that amount are qualified for 50% Bonus Depreciation.
These are large tax advantages, providing attractive incentives to woodworking businesses that are purchasing new & used machinery in 2012 to replace aging equipment or to increase production with a move toward leaner and more profitable manufacturing processes.
Recent tax legislation has given woodworking manufacturers a huge incentive to purchase and install new & used woodworking equipment in 2012. Section 179 of the IRS Tax Code allows a business to deduct, for the current tax year, the full purchase price of woodworking machinery and equipment that qualifies for the Section 179 deduction.
Note: the qualifying woodworking machinery and equipment must be installed prior to December 31, 2012 to qualify. Act now!
Use this Instant Leasing Payment Calculator here
to review your options for leasing
New & Used Woodworking Machinery & Equipment
What is Section 179?
US Tax Code Section 179 is the business equipment expense deduction that allows small and medium sized businesses to deduct the cost of needed business equipment and software. It is used by companies who elect to treat the purchase of qualifying property as an expense rather than a capital expenditure, and provides substantial tax relief.
What are the newest changes to Section 179 for the year 2012?
Both the ‘Tax Relief Act of 2010′ and the ‘Jobs Act of 2010′ passed in late 2010 affected Section 179 in a positive way for the 2012 tax year as follows:
- The Section 179 Deduction limit is $139,000. The total amount of equipment that can be purchased is $560,000. This incentive includes most new and used capital equipment, and also includes certain software.
- “Bonus Depreciation” of 50% on qualified assets is available on amounts above the threshold. However, Bonus Depreciation can be taken on new equipment only.
Does leased or financed woodworking machinery & industrial equipment qualify for Section 179?
Yes, and because the amount you deduct will exceed your cash outlay for 2012, a properly structured Equipment Lease or Equipment Loan combined with taking Section 179 is a bottom-line enhancing tool (plus, you get the new equipment and software you’re adding to your business).
Are there any qualifying restrictions regarding the purchase of woodworking machinery under section 179?
The woodworking machinery or industrial equipment purchased or leased must be within the specified dollar limits of Section 179, and the equipment must be placed into service in the same tax year that the deduction is being taken (for tax year 2012, this means the equipment must be put into service between 01/01/2012 and 12/31/2012).
Click here to view the Section 179.Org free resource answering questions related to the Section 179 Tax Deduction
And to review how much you can save with leasing new & used woodworking machinery & equipment click here to use the Section 179 Tax Deduction Calculator From Crest Capital
Consult your tax adviser for specifics.
And for more information on selecting your new & used woodworking machinery, call First Choice Industrial, a full-service new and used industrial woodworking machinery dealer and UWME Member, located in metro Atlanta, serving commercial woodworking industry professionals in GA, FL, TN SC, NC & nationwide.
First Choice Industrial Woodworking Machinery Sales and Service
145 Auburn Park Drive
Auburn, GA 30011
Phone: 678-642-9722 – Email: sales@firstchoiceind.net
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