Buy or Lease Machines – Bonus Depreciation & Section 179 Expensing

Buy or Lease Machines – Bonus Depreciation & Section 179 Expensing

  • 05 Apr Off

The Protecting Americans from Tax Hikes (PATH) Act Enacted December 2015 provides TAX INCENTIVES FOR MAZAK MACHINES

Update Note: Special pricing and incentives have been extended.
 
Please read this article to learn more.

50% BONUS DEPRECIATION EXTENDED THROUGH 2017
  • Bonus Depreciation – 1st Year Bonus Depreciation Deduction of 50% is available through December 31, 2017 for NEW machines. (Does not apply to used machines.)
  • The bonus depreciation deduction is not capped at a certain dollar level of qualified capital expenditures.

SECTION 179 EXPENSING MADE PERMANENT
  • Section 179 expensing – The Section 179 expensing limit is $500,000, with a dollar-for-dollar phase out of the deduction beginning once qualified expenditures exceed $2,010,000.
  • The increased 179 expensing limit is permanent effective January 1, 2015. This deduction applies to new and used machines.

EXAMPLE OF FIRST-YEAR DEPRECIATION CALCULATION

$500,000 machine purchase/qualified expenditures

Section 179 Expensing $500,000
Total depreciation $500,000
Tax savings at 35% Tax Rate $175,000

 

$1,000,000 machine purchase/qualified expenditures

Section 179 Expensing $500,000
50% depreciation $250,000
14% regular depreciation $35,000
Total depreciation $785,000
Tax savings at 35% Tax Rate $274,750

 

For questions, contact Dave Augustyniak  at (716) 652-8282 or daugustyniak@awmiller.com/awm. We can structure loans, or lease/purchases that keep these incentives available for you. Also, please discuss with your tax advisor to understand the specific impact to your business.

Source: https://www.mazakusa.com/financing/section-179/