Business Equipment Deductions

Q. How much can my business deduct for 2010 (and 2009) for the purchase of new equipment and software?

A. If you run a business, you can immediately deduct the cost of qualifying equipment with the Section 179 deduction. For tax years beginning in 2010 and 2009, the maximum deduction amount is $250,000. Another "bonus depreciation" tax break, which was available for 2009 taxable years, expired and is currently not available for the 2010 tax year.

The Section 179 depreciation deduction is a a helpful exception to the general rule that businesses must depreciate most equipment and software costs over several tax years. Both new and used assets qualify but leased equipment is not eligible.

The information in this Tax Guide is for general guidance only, and does not constitute legal advice, tax advice, accounting services, investment advice, or professional consulting. The information should not and may not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making decisions or taking actions, consult a professional adviser who has been provided with all pertinent facts relevant in your particular situation. Tax articles in this Guide are not intended to be used, and cannot be used, for the purpose of avoiding accuracy-related penalties that may be imposed on a taxpayer.