Don't Depreciate... Expense It!

2012 Tax Year
Your company may benefit by the following:
The 2012 Deduction Limit is $139,000. This is good on both NEW and USED equipment. There is a limit of $560,000 maximum that may be spent on equipment before the Section 179 Deduction available begins to be reduced.

This is a great way for you to maximize your bottom line and increase your ROI.

There is also a bonus depreciation of 50% which you may be able to take after the $560,000 limit in capital equipment is reached (Note: This is available for NEW equipment only).

For more information visit: www.section179.org

Please consult your tax professional for the most up to date and accurate tax advice.

Disclaimer: Sterling Machinery in no way guarantees any deduction, we are not tax professionals and you should research the option that is best for your individual situation with a tax professional.

The bad news first: Congress did nothing to help the used machinery industry when it increased the accelerated depreciation of new capital equipment purchases from 30% to 50%. Used Machinery was specifically excluded from this tax break by referring to the qualifying verbiage of last year's law.

Now the good news: Congress did help the used capital equipment industry, by raising the amount a company may expense in the first year from $25,000 to $100,000. By not attaching any language to this provision, used capital equipment would be included.

It works like this:
In order to write off the cost of capital expenditures, a company may choose to either depreciate or expense the purchase. If a company purchases new equipment, they may only depreciate it. However, if a company purchases used equipment and the cost of the machine is $100,000 or less, they then may elect to either depreciate or expense it. So, now with the ability to write off up to $100,000 in the first year of purchase (using the expensing method), used equipment may be much more appealing to the prospective machinery customer. Expensing is covered in the IRS Code Section 179. Just like the ability to take advantage of accelerated depreciation, there are certain restrictions on the ability to expense. As with any purchase, a customer should consult their own advisors. However, the MDNA consulted with two independent tax accountants who have verified our findings that purchasers of used machinery may take advantage of this new tax law's expensing provision.