The NEW Section 179 deduction limit for 2012 is $125,000. There is a $500,000 cap of qualified expenses that are eligible to be reduced and is available for most new & used capital equipment & certain software. Bonus Depreciation of 50% (new assets only) is available on qualified assets placed in service during 2012. This bonus deduction is for businesses that exceed $500k in capital equipment purchases.

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 from your gross income.

Successful businesses take advantage of legal tax incentives to help lower their operating costs. The Section 179 Deduction is a tax incentive that is easy to use, and gives businesses an incentive to invest in themselves by adding capital equipment. In short, taking advantage of the Section 179 Deduction will help your business keep more capital, while also getting needed equipment and software.

Calculate Your Savings:

Equipment cost: $500,000 or less. If greater, contact a Stearns Bank representative at 1-800-247-1922.

Results

Section 179 Deduction:

Total first year deduction:

Cash savings on equipment purchase (assuming a 35% tax bracket):

Lowered cost of equipment after tax savings:

Always contact your tax advisor to verify tax or accounting issues or visit www.irs.gov for specific details.