Section 179 Deduction and Bonus Depreciation 2014 Update

Author: Amy Volk | Posted: 1/20/2014

Section 179 of the Internal Revenue Code allows your customers to expense a portion of equipment purchases (new or used) in any given year.  This essentially allows customers to accelerate depreciation of the equipment and the related tax savings.  In 2013, this deduction could be used by any customer making purchases of equipment (or other property that must be depreciated) that totaled $2,000,000 or less in that year.   If your customer was in this category, $500,000 of these purchases could be deducted under Section 179.

The bad news for dealers is that in 2014 the Section 179 deduction amount drops to $25,000, and the maximum amount of equipment that can be purchased before the deduction begins to be phased out is $200,000 (the deduction will be completely phased out once purchases exceed $225,000).


Source: Seigfreid Bingham, PC