Bonus Depreciation
Prior to the 2010 Tax Relief Act, 50% bonus depreciation was extended for qualifying assets placed in service in 2010. Due to the 2010 Tax Relief Act, bonus depreciation increased to 100% for qualifying assets placed in service between September 9, 2010 and December 31, 2011. Fifty percent bonus will apply for any assets placed in 2012. The Tax Policy Center estimates the cost of this provision will be $20.9 billion. This will allow businesses to take considerable federal deductions on qualified capital purchases. Many states may continue to “decouple” from the bonus and Section 179 provisions at the federal levels. While the 100% bonus depreciation may make Section 179 expensing less valuable, there may still be a benefit to maximizing a Section 179 expense that is allowable in a certain state if they do not recognize the full amount of bonus depreciation.
If you have any questions or would like more information, please contact Wood, Atter & Wolf, P.A., in Jacksonville and Ponte Vedra Beach, Florida.
