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2010-2011 Tax Relief Act Tax Savings Calculator Sample Back to Depreciation Summary |
How it Works In addition to the immediate expensing allowed under IRC Section 179, businesses acquiring qualifying new** equipment are allowed to depreciate those costs by utilizing a temporary 100% bonus depreciation allowance. Additional expensing for both new and used qualifying equipment is allowed with the use of a standard first year depreciation allowance (under MACRS rules, 20% for equipment with 5-year class life as defined in IRC Section 168). The amount expensed under Section 179 is limited to a taxpayer's taxable income and is reduced dollar-for-dollar to the extent a business purchases more than $2,000,000 of qualifying equipment prior to January 1, 2012.* |
5-YEAR ASSET LIFE - TAX SAVINGS CALCULATION SAMPLE |
Enter Equipment Cost Here > |
$100,000.00 |
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DEDUCTIONS: |
NEW |
USED |
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$100,000.00
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$100,000.00
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$100,000.00
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$100,000.00
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N/A
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$100,000.00 |
$100,000.00 |
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| TAX SAVINGS: | |||||
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$100,000.00 |
$100,000.00 |
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35% |
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= |
$35,000.00 |
$35,000.00 |
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| EQUIPMENT COST: | |||||
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$100,000.00 |
$100,000.00 |
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$35,000.00 |
$35,000.00 |
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$65,000.00 |
$65,000.00 |
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TAX SAVINGS SIGNIFICANTLY REDUCE YOUR COST OF EQUIPMENT OWNERSHIP |
* This information does not constitute tax advise. Consult with your tax advisor to determine how to use equipment financing to take advantage of expensing and depreciation tax savings or visit www.irs.gov for additional information. Section 179 deductions are not automatic and qualifying taxpayers who want to take advantage of the deduction must elect to do so on IRS Form 4562. |
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