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Business Tax Credit for 2016


Section 179 has been enhanced for 2013. This is due to the passage of H.R.8: American Taxpayer Relief Act of 2012 (The "fiscal cliff / fiscal crisis" bill).

2016 Deduction Limit = $500,000

2016 Limit on Capital Purchases = $2,000,000

2016 Bonus Depreciation = 50%


The Section 179 Deduction is now $500,000 for 2016. This means businesses can deduct the full cost of equipment from their 2016 taxes, up to $500,000, with a "total equipment purchased for the year" threshold of $2,000,000. Yes, this is a ROBUST deduction and you should take advantage of it for your 2016 taxes.

Please Note:
Section 179 Deduction is available for most new and used capital equipment, and also includes certain software.

Bonus Depreciation can be taken on new equipment only (no used equipment, no software)

When applying these provisions, Section 179 is generally taken first, followed by Bonus Depreciation unless the business has no taxable profit in the given tax year.