If you’ve ever thought about getting yourself a nice little tax break through Section 179, you’ve thought about what’s coming in 2013.
We’ve spent a lot of time here at PointBlank talking about Section 179 deductions because it’s such a nice tax benefit. In the past, you’ve been able to deduct almost a quarter million dollars worth of equipment, and this year it’s still almost $140,000. It’s only next year when that deduction drops precipitously, all the way down to $25,000.
You can see some of our past articles for more on the intricacies of Section 179, but suffice to say that’s a pretty big drop. While financing equipment can still be a breeze with the right financing provider, it does mean you’re not going to get the same tax break. To put it scientifically, that’s a bummer.
What would it take to save the current form of the deduction? It would, in essence, require the extension of and re-approval of tax deductions which include Section 179. Whether that happens or not depends on that most august and intractable of institutions, Congress.
So how will the 2012 elections change the fate of Section 179? After this much buildup, I hate to tell you that it’s impossible to say. I can tell you that Republicans have come out strongly in favor of small business, and this is a benefit to small businesses. I can also tell you that I’ve heard absolutely nothing indicating that the party has any interest in extending these cuts. Ditto the Democrats, who don’t have the same business-friendly reputation but tend to be fans of small businesses, as well.
The most likely outcome is that Section 179 dips into the $25,000 range in 2013 and, if Congress hears a strong enough pushback from small businesses who have found it to be a useful tool, they may increase it back in 2014. Emphasis on may, but it’s worth trying.
So while we don’t know, I would urge you to make this issue known to your representatives in Washington. Tell them you’d like to see Section 179 increased held at its current level, at least, into 2013 and beyond. We certainly will do the same.
Have you used Section 179? Let us know!
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