While legislative efforts to extend a six-figureseem to have stalled in Congress, business owners are left in a quandary. Should you buy new equipment this year if the cost puts you over the current first-year deduction limit?
Strategy: Wait to see what happens. The prospects for aextension should appear clearer after the November midterm elections.
Here’s the whole story: Under Section 179, your business can currently deduct the cost of qualified business property placed in service up to an annual limit. For this purpose, “qualified business property” includes most types of tangible personal property, both new and used, and software.
Congress has toyed with the annual limit over the past 15 years (see box below). Going back to 2000, the maximum Section 179 deduction was only $20,000. After legislation increased the limit to $250,000 in 2008, Congress increased it again to $500,000 in 201...(register to read more)