The Hardinge Group Blog

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All new $500,000 write-off for manufacturing companies.

Small Business Jobs Act of 2010, H.R. 5297 was passed by the House and Senate and signed into law by the President on September 27, 2010.

$500,000 write-off!
Section 179 Federal Income Tax Deduction: This deduction allows a company to deduct the first $500,000 of equipment (Section 179 Property) purchased in 2010 or 2011 from their taxable income. For companies purchasing (or leasing with a $1.00 buyout lease) up to $2,000,000 of equipment in 2010 or 2011, this deduction is available in full. It then phases out on a dollar-for-dollar basis between $2,000,000 and $2,500,000 and it is not available for companies purchasing over $2,500,000 of equipment in 2010 or 2011. However, companies can finance purchases over $2,000,000 with an operating lease and may still be able to claim this deduction.

50% Bonus Depreciation
The new law extends, through December 31, 2010, 50% first-year bonus depreciation which had expired at the end of 2009. The extension is retroactive to January 1, 2010.
The new law carries a very short window of opportunity — qualifying equipment must be purchased and placed into service on or before December 31, 2010.

Standard Depreciation
Additionally, companies can take their standard depreciation deductions on the adjusted basis of qualified equipment. Machine tools and fabricating equipment are typically depreciated over 7 years.

Always check with your accountant to confirm eligibility for tax benefits.