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AMT Summarizes New Tax Incentives   

Published: 1/8/2013


President Obama signed “The American Tax Relief Act of 2012” into law. The new law includes an extension of the 50% bonus depreciation through 2013 and increases Sec. 179 expensing limits for 2012 and 2013. This is a major victory for manufacturers, according to AMT (The Association for Manufacturing Technology).


50% Bonus Depreciation Extended

For the 2012 and 2013 tax years, 50% bonus depreciation on new equipment purchases is allowed. Unlike Section 179, there is NO CAP on the amount of the equipment that can be depreciated under this bonus depreciation provision.


Section 179 "Small Business" Expensing Increased

The Section 179 expensing allowance is boosted to $500,000 for new and used equipment purchases ordered and placed in service in the 2012 and 2013 tax years. Moreover, the cap on how much equipment can be purchased to fully enjoy the write-off increases to $2 million (after which the amount that can be deducted phases out dollar for dollar.


AMT prepared an example of how these tax incentives can benefit companies.


SOURCE: The Association for Manufacturing Technology (AMT)