Small Business Expensing

Section 179 of the Internal Revenue Code allows small businesses to elect to deduct the total cost of certain qualifying tangible property in the year it is placed in service. Expensing provides an incentive to invest in the business and immediately puts money back into the business.  Expensing also simplifies the tax code by allowing an immediate deduction, instead of depreciation deductions over a specified recovery period. However, there are limits on the amount you can deduct in a year and on the types of properties that qualify. 

NFIB has long fought to increase the small business expensing limit, which recently was as low as $25,000 in the year of purchase.  In 2007, the expensing amount was increased to $125,000 (increased annually for inflation) and the stimulus bills inn 2008 and 2009 increased the amounts for those years to $250,000.

However, the expensing-limit increase will expire and return to its previous level of $25,000 after 2010 unless Congress passes additional legislation to make this provision permanent. A majority of NFIB members exceed the $25,000 mark in just three months. NFIB will continue its fight for Congress to pass a permanent solution to this important small business incentive. This will allow small firms to plan for the future and expense additional investments, therefore enabling those businesses to expand and create new jobs. 

To learn more about how you can take advantage of Section 179, please visit http://www.section179.org/index.html.