Tax Benefits of 2013 Expire Soon!

Don’t hesitate to take advantage of this year’s increased Section 179 tax savings. The Section 179 tax benefits will decrease significantly for 2014, unless there are changes to the current law.

About Section 179

  • Created to help businesses purchase or lease new equipment
  • An easy strategy to improve your 2013 bottom line
  • Significant impact to cash flow and profits when combined with leasing
  • In most cases, write-off more than your total first year’s payments
  • Valid on most types of equipment and standard software

Tax Savings in 2013

With the increases from the American Taxpayer Relief Act of 2012, businesses in 2013 can write off up to $500,000 with a 50% bonus depreciation (on new equipment after the $500,000 deduction is reached). Assuming there are no changes in the law, in 2014 businesses will only be able to write off $25,000 with no bonus depreciation.

Example of 2013 vs. 2014

 

 

Equipment Cost:

Write-off:

    ($500,000 in 2013, $25,000 in 2014)

50% Bonus Depreciation

   (Amount over $500,000 in 2013)

Normal 1st Year Deduction

Total 1st Year Deduction

Tax Savings:

   (Assuming 35% tax rate)

Equipment Cost After Tax Savings:

 

Tax Savings 2013

 

$500,000

$500,00

 

$25,000

 

$5,000

$530,00

$185,500

 

$364,500

 

vs.

Tax Savings 2014

 

$550,000

$25,000

 

$105,000

 

$130,000

$105,000

$45,500

 

$504,500

A $140,000 difference from 2013-2014!

Take advantage of 2013 tax benefits before it’s too late - contact ProcessPro today!

For more information on Section 179 tax benefits please consult with your tax advisor or visit www.irs.gov.