IRS Offers Special Tax Breaks to Small Businesses
Section 179 of the United States Internal Revenue Code (26 U.S.C. § 179) allows taxpayers to elect to deduct the cost of certain types of property for tax purposes as an expense, rather than requiring the cost of the property to be capitalized and depreciated. Eligible property is generally limited to tangible, depreciable, personal property (like an Isuzu truck!) which is acquired for use in the active conduct of a trade or business. In addition to standard depreciation on new trucks, bonus depreciation may also be available.
2015 Deduction Limit = $25,000
This deduction is good on new and used equipment, like a new Isuzu truck or a Isuzu GoldStar® previously owned truck. This limit is only good for 2015, and the equipment must be financed / purchased and put into service by the end of the day, 12/31/2015.
2015 Spending Cap on equipment purchases = $200,000
This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced on a dollar for dollar basis. This spending cap makes Section 179 a true “small business tax incentive”.
Bonus Depreciation: not available in 2015
In prior years, Bonus Depreciation would be taken after the Section 179 Spending Cap is reached. Note: Bonus Depreciation was available for new equipment only; in 2015, Bonus Depreciation is not available at all.
2015 Section 179
Example Calculation

2015 or 2016 Isuzu N-Series:

First Year Write Off: ($25,000 Maximum 2015)

50% Bonus First Year Depreciation: (not available in 2015)

Normal First Year Depreciation: (20% in each of 5 yrs on remaining amount)

Total First Year Deduction: ($25,000 + $5,000)

Cash Savings: ($30,000 x 35% tax rate)

Equipment cost after tax: (assuming a 35% tax bracket)

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