If a business could write off the entire amount, they might add more equipment this year instead of waiting. That's the whole purpose behind Section 179.
The American Recovery and Reinvestment Act of 2009 has extended the one-year increase through the end of 2009. Unless it is extended, the Section 179 Deduction phases out completely in 2010, so if you want to take advantage of the higher limits, you need to act before the end of this.
What is the Section 179 Deduction ??
Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE (up to $250,000) from your gross income. It's an incentive created by the US Government to encourage businesses to buy equipment and invest in themselves.
Who Qualifies for Section 179??
All businesses that purchase or finance less than $800,000 in business equipment should qualify for the Section 179 Deduction. In addition, most tangible goods qualify for the Section 179 Deduction (almost all types of "business equipment" qualify for the Section 179 deduction). Also, to qualify for the Section 179 Deduction, the equipment purchased must be placed into service between January 1, 2009 and December 31, 2009.
Limits of Section 179
There are caps to the total amount written off ($250,000 in 2009).
Section 179 limits to the total amount of the equipment purchased ($800,000 in 2009.)
Depreciation Vs Section 179: SAVE More under section 179
When your business buys certain pieces of equipment, it typically gets to write them off a little at a time through depreciation. In other words, if your company spends $400,000 on an equipment, it gets to write off (say) $80,000 a year for five years.
Now, while it's true that this is better than no write off at all, most business owners would really prefer to write off the entire equipment purchase price (Under Section 179) for the year they buy it .
Benefit of Section 179 : Buy more equipment this year and write off entire equipment (Max $250,000) purchase price..
Total Deductions = 1st year write off up to $250,00 + 50% Bonus Depreciation on the remaining amount + Normal Depreciation write off 20% on the balance for 5 years
 Section 179 Deduction Calculator Act Now..Unless it is extended, the Section 179 Deduction phases out completely in 2010
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