| "Depreciation." For business owners, this word is the | | | | As part of the Job Growth and Reconciliation Act of |
| one most likely to inspire headaches and fits of | | | | 2003, the one-year deduction amount was increased |
| cussing. The expanded provisions of Section 179 are | | | | from $25,000 to $100,000. The 100,000 figure will be |
| just the medicine you need to cure the depreciation | | | | adjusted for inflation each year, which means it will |
| blues. | | | | continue to increase. This is very good news. |
| Depreciation | | | | What Property Qualifies? |
| Traditionally, if your business property had a life of | | | | You can deduct the cost of the following property |
| more than one year, the cost had to be deducted | | | | under Section 179: |
| over several tax years. The number of years | | | | 1. Machinery and equipment |
| depended on the characteristics of the property, which | | | | 2. Furniture and fixtures |
| made depreciation the flag-bearing example of the | | | | 3. Computer software. |
| complexities of the tax code. Shockingly, the federal | | | | You must elect Section 179. It is not automatically given |
| government has provided substantial relief to business | | | | to you. Simply fill out IRS Form 4562 and attach to the |
| owners. | | | | returns for the business. |
| Section 179 of the Internal Revenue Code has been | | | | In Closing |
| dramatically expanded to the benefit of businesses, | | | | As shocking as this will sound, the government should |
| particularly small ones. This code allows businesses to | | | | be applauded for expanding Section 179. Small |
| completely deduct the cost of tangible property in the | | | | businesses are burdened by too many regulations and |
| year of purchase. The tax relief comes from the | | | | mandatory costs. The expansion of Section 179 is a |
| expansion of the total amount that can be deducted in | | | | nice piece of tax relief legislation. Let's hope more is on |
| one year. | | | | the way. |
| Huge Deduction Increase | | | | |