2011 Tax Benefits for New Equipment

Both the 'Tax Relief Act of 2010' as well as the 'Jobs Act of 2010' that passed in late 2010 affected Section 179 of the IRS Tax Code in a positive way for this 2011 tax year. Section 179 allows a business to deduct, for the current tax year, the full purchase price of financed or leased equipment that qualifies for the deduction.

The newest changes include:

• The Section 179 Deduction limit increased to $500,000. The total amount of equipment that can be purchased increased to $2 million. This includes most new and used capital equipment, and also includes software.

• Equipment must be put into service between January 1, 2011 and December 31, 2011.

 • The “Bonus Depreciation” increased to 100%. This can be taken on new equipment only.

When applying these provisions, Section 179 is generally taken first, followed by Bonus Depreciation – unless the business has no taxable profit in 2011. Consult your financial and tax advisors to discuss details of the impact of the legislation on your justification for the purchase of an IMS waterjet cutting system in 2011.

Example—100% Bonus Depreciation/Section 179 through 2011

Your company’s total new equipment purchases don’t exceed $2 million. You can expense 100% of the purchased equipment in the first year.

New machine cost= $100,000

100% Bonus Depreciation = $100,000
Total First-year Deduction = $100,000—100% write-off in 1st year

For an overview and illustrations of the advantages for businesses 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 ).

Please contact us to discuss a purchase/lease program for new or used systems and start taking advantage of the 2011 tax benefits today.

Contact Us

Industrial Motion Systems
353 Christian Street
Oxford, CT 06478
203.262.6146