New machinery purchased and installed during 2012 qualifies for special 50% Bonus Depreciation and Section 179 expensing of $125,000 on new equipment investments up to $500,000.
This favorable tax treatment for manufacturers’ capital equipment investment is set to expire December 31, 2012, and it is uncertain what the 2013 tax climate might be. Passed into law on Sept. 27, 2010, as a component of the Small Business Jobs and Credit Act of 2010, H.R. 5297, the special incentives are a “bird in the hand” for forward-looking managers who are able to plan ahead to replace out-of-date equipment, add capacity, lower manufacturing costs or streamline processing.
Using the Section 179 Deduction and Bonus Depreciation in combination can result in a write-off of up to 68% of the machine purchase price in the first year! However, there is an important restriction – the equipment must be purchased and installed before the end of 2012, so time will soon be running out for long-lead machinery with substantial engineering content.
For an overview and illustrations of the advantages for manufacturers in Section 179 of the IRS Tax Code, visit www.section179.org or see the recap provided on the web site of the Association for Manufacturing Technology ( www.amtonline.org ). Consult your financial and tax advisors to discuss details of the impact of the special incentives on your justification for the purchase of a Guyson manual, automated or robotic blast system in 2012.