Section 179 and Other Items Adjusted for Inflation for 2010

Here is the announcement we have been waiting for--the limitations for Section 179 for 2010. For taxable years beginning in 2010, under §179(b)(1) the aggregate cost of any §179 property a taxpayer may elect to treat as an expense cannot exceed $134,000. Under §179(b)(2), the $134,000 limitation is reduced (but not below zero) by the amount by which the cost of §179 property placed in service during the 2010 taxable year exceeds $530,000. This is a huge reduction from the 2009 limitation of $250,000 on purchases not exceeding $800,000. Clearly 2009 is the year to make the bulk of your business asset purchases (and this certainly includes alpacas) especially when you consider that this year also has the 50% bonus depreciation deduction available on NEW asset purchases.

As shared in previous blog entries, this deduction is scheduled to be reduced again in 2011 to $25,000 on purchases not exceeding $200,000. So if you don't make your purchases in 2009 don't miss your opportunity in 2010.

The same publication also includes other deductions and limitations adjusted annually for inflation. Here is the link to the publication:

http://www.irs.gov/pub/irs-drop/rp-09-50.pdf

So start sharpening your pencils and figure out how these deductions can do you the most good while the limitations are at their maximum.