With the passage of the PATH ACT in December 2015, the Section 179 deduction limit has been expanded to $500,000.
This expanded relief for businesses covers most equipment purchases during 2016.
Here’s a simplified overview from www.section179.org:
2016 Deduction Limit = $500,000
This deduction is good on new and used equipment, as well as off-the-shelf software. This limit is only good for 2016, and the equipment must be financed/purchased and put into service by the end of the day, 12/31/2016.
2016 Spending Cap on equipment purchases = $2,000,000
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: 50% for 2016
Bonus Depreciation is generally taken after the Section 179 Spending Cap is reached. Note: Bonus Depreciation is available for new equipment only.
Note:Always consult your tax adviser or accountant for more information on all tax-related matters and how they affect you.