Keystone University

For the 2016 tax year, the Section 179 Tax Deduction Limit has been raised back to $500,000, the increased level in effect in 2013 and is not reduced until the cost of section 179 property placed in service exceeds $2 Million.

Understanding The Section 179 Deduction. Click this link to see how Section 179 can benefit your business in 2016.

What you should know:

• 2016 is a great year to buy and save on used machinery!
• 2016 Expense Deduction Limit has been raised to $500,000
• 2016 Limit on Capital Purchases = $2 Million
  Section 179 Threshold for total of equipment & software that can be purchased has increased to $2 Million (threshold would have been only $500,000 prior to the new legislation).
• 2016 Bonus Depreciation = 50%
  The new law allows 50% “Bonus Depreciation” on qualified assets placed in service during 2013 and 2014.

Please note:

• Section 179 Deduction applies to most new and used capital equipment, and also includes certain software.
• Bonus Depreciation only applies to new equipment (no used equipment, no software)

When applying these provisions, Section 179 is generally taken first, followed by Bonus Depreciation – unless the business has no taxable profit in the given tax year.

Sample Savings*