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Comparing Section 179 and Bonus Depreciation Limits

Posted by Mike C Posted on Dec 28 2012

As we near the end of 2012, it's worthwhile remembering that the Section 179 deduction limit is based on the business's tax year while the bonus depreciation limit is based on a calendar tax year. The Section 179 limit for tax years beginning in 2012 is $139,000, subject to a $560,000 deduction phase-out threshold, while 50% bonus depreciation is available to qualified assets placed in service by 12/31/12. Calendar-year businesses can get 50% bonus depreciation and a Section 179 deduction of up to $139,000 for qualifying assets acquired and placed in service in 2012. Fiscal-year businesses can acquire and place assets in service after 12/31/12 and still get a $139,000 Section 179 deduction, as long as they do so by the end of the fiscal year ending in 2013. But to claim 50% bonus depreciation, they must acquire and place the assets in service by 12/31/12.