The recent "fiscal cliff" deal has provided an unexpected benefit to equipment buyers.
Section 179 provides for the immediate expensing of qualifying assets, and it was scheduled for a big drop in 2012 and beyond. This section allowed for the immediate write-off of up to $500,000 in assets in 2011, but only $125,000 in 2012 and $25,000 in 2013. The fiscal cliff deal changed all of that, however, increasing the limit back to $500,000 for 2012 and 2013. Similarly, the amount of qualifying assets that can be placed in service before a reduction in the limitation is required has been increased from $500,000 in 2012 and $200,000 in 2013 to $2,000,000 in both years. Furthermore, the definition of “qualifying assets” will continue to include computer software in 2013, as the new legislation extended this piece of Section 179 for one year.
While this change obviously came too late to influence any 2012 purchasing decisions, it will provide a nice little bonus come tax return-time for taxpayers who invested in significant assets during the year even in the absence of the higher Section 179 incentives.