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Ask A CPA - Section 179 Deduction - 2014

Depreciation - 179 Expense Election

Section 179 limits are now locked-in by the Protecting Americans from Tax Hikes Act of 2015 which allows businesses to write-off up to $500,000 of qualified equipment each year. If you elect to expense section 179 property, you must reduce the amount on which you figure your depreciation or amortization deduction (including any special depreciation allowance) by the section 179 expense deduction. You may elect to deduct all or part of the cost of certain qualifying property in the year you place the asset in service as opposed to recovering the cost over the assets useful life(depreciation). This choice is called a Section 179 Election. Any disallowed amount in the current year may be carried over to future years. The 179 deduction is reportable on IRS Form 4562. You can elect to expense part or all (up to $500,000) of the cost of section 179 property that you placed in service during the tax year and used predominantly (more than 50%) in your trade or business.

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