Here
are 3 tax saving moves to remember for your
business prior to the end of the 2011:
100 Percent Bonus Depreciation
Businesses can claim 100% first year bonus
depreciation for qualifying new equipment
and software placed in service by December
31, 2011. This tax break covers such items
as computers, phone systems, office
furniture, machinery and software. Also, new
real estate land improvements (sidewalks,
drainage systems, etc.) and certain
leasehold improvements may qualify as well.
Section 179 Deduction for Real
Estate Improvements
You
can claim a deduction for qualified real
property improvements placed in service for
the tax year beginning in 2011. You can
claim a first-year Section 179 deduction of
up to $250,000. Real estate improvements are
traditionally not eligible for the Section
179 deduction, so 2011 is an exception.
This
temporary break applies to the following
types of real property:
- Interiors of leased
nonresidential buildings
- Interiors of retail buildings
The
$250,000 Section 179 allowance for real
estate is part of the overall $500,000
allowance, and it will not be available for
tax years beginning after 2011 unless it is
extended by Congress.
Section 179 Deduction for Used
Equipment and Vehicles
For
tax years beginning in 2011, there's a much
larger $500,000 first-year Section 179
depreciation deduction for assets that are
not SUVs, like most business equipment and
software -- including used assets. For
example, this break covers used office
furniture and used machinery.
The
up-to-$500,000 Section 179 deduction
privilege is also available for used heavy
pickups and vans (meaning those with GVWRs
above 6,000 pounds) that are not classified
as SUVs under the tax law.
One
final caveat for Section 179 deductions, you
cannot claim a Section 179 write-off that
creates or increases an overall business tax
loss.
Always
check with your accountant to determine the
appropriate tax deductions your company is
eligible to take.
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