A component of the Small Business Jobs and Credit Act of 2010, H.R. 5297, passed into law on Sept. 27, 2010, extends Section 179 expensing to machinery and equipment purchased and installed during the 2011 tax year.
The legislation is considered a big win for U.S. manufacturers, in part because it includes the extension through 2011 of the generous 2010 tax deduction for capital equipment purchases, but also because it reinforces the immediate stimulus to investment by offering bonus first-year depreciation. Before the end of the 2010 legislative session, both of these incentives for capital equipment investment were enhanced for the 2011 tax year, with the allowable Section 179 expensing increased to $500,000 for equipment purchased and placed in service before December 31, 2011, and with first-year bonus depreciation increased to 100% on equipment purchases in the tax year 2011.
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 legislation on your justification for the purchase of a Guyson manual, automated or robotic blast system in 2011.