The Section 179 Deduction is expiring on December 31, 2012. This piece of tax code was put into place to act as an incentive by the U.S. government to encourage businesses to buy equipment and invest in themselves. It’s often called the “SUV Tax Loophole” in recognition of the vehicle write offs that are permitted under this section of the tax code. To qualify, the equipment, vehicle(s), and/or software must be used for business purposes more than 50% of the time.
Here’s a more detailed representation of the Section 179 Deduction taken from its website:
012 Deduction Limit = $139,000
This is good on new and used equipment, as well as off-the-shelf software.
2012 Limit on equipment purchases = $560,000
This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced.
Bonus Depreciation = 50%
This is taken after the $560k limit in capital equipment purchases is reached. Note: Bonus Depreciation is available for new equipment only. Bonus Depreciation can also be taken by businesses that will have net operating losses in 2012.
The above is an overall, “simplified” view of the Section 179 Deduction for 2012. For more details on limits and qualifying equipment, as well as Section 179 Qualified Financing, click here or talk to your accountant. http://www.section179.org/section_179_deduction.html
That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. This would include website or software purchases. Your website can be fully deducted as software purchased or financed during the 2012 tax year.
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