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2013 Tax Incentives for Manufacturing Companies
Section 179 has been enhanced for *both* 2012 and 2013 tax years (2012 is retroactive). This is due to the passage of H.R.8: American Taxpayer Relief Act of 2012.
2013 Deduction Limit = $500,000
2013 Limit on Capital Purchases = $2,000,000
2013 Bonus Depreciation = 50%
Please note the above limits are as of 1/1/2013, and are for tax year 2013. In addition, 2012's old limit ($125,000 deduction) has now been raised to $500,000 as well. This means qualifying purchases you made in 2012 can now take advantage of the new, higher deduction limits.
Section 179 Deduction is available for most new and used capital equipment, and also includes certain software.
Bonus Depreciation can be taken on new equipment only (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.
Companies should always talk to their accountant to confirm eligibility for tax benefits.