As predicted the Senate has passed a year-end budget deal that would increase the Section 179 limit from $25,000 to $500,000. The deal was passed earlier today and has been sent to the President for signature to which the White House is reporting the President will sign into place. This is outstanding news for organizations looking to make major capital equipment purchases at the end of year. Previously under the $25,000 limit and assuming a 35% tax bracket, the largest cash savings available on your purchase was $8,750. With the limit increased to $500,000 that cash savings on capital equipment purchases may now be as large as $175,000.
The same rules still apply for the Section 179 tax deduction. In order to apply the credit you must pay or or finance your capital equipment by midnight on December 31, 2015. You must also have said purchase on site at your facility by the December 31st midnight deadline. The Section 179 tax deduction may be applied for both new and used machinery purchases.