The Protecting Americans From Tax Hikes Act Of 2015

Section 179 Expanded & Permanent

Last week “The Protecting Americans From Tax Hikes Act of 2015” was passed by both the House and Senate and is expected to be signed into law. This new law expands the available deduction under Section 179 from $25,000 to $500,000, and makes this type of deduction permanent for subsequent years to come. The new law will also bring back bonus depreciation through 2019, which allows businesses to depreciate 50% of the cost of the equipment that was put into service during 2015, 2016, and 2017. Available bonus depreciation will then phase down to 40% in 2018 and 30% in 2019.

Summary of Guidelines

  • Available deduction for 2015 is now up to $500,000
  • Deduction phases out dollar for dollar at $2,000,000 and is eliminated at $2,500,000
  • Available for tangible New or Used Equipment that is actively used by the business
  • Asset(s) must have a normal depreciation deduction
  • Equipment must be purchased and installed to qualify for deduction in given tax year

What Does This Mean To Me?

If you are buying equipment you will want to know how much money you can save on your equipment purchases. And if you are selling equipment you will want to be able to show how much this law can save a customer on their equipment purchase. Either way, a Section 179 Tax Savings Calculator is a valuable tool to have and use in order to see how much money is at stake. All of our calculators have this tool and have recently been updated to reflect the changes this new law will enact.

Using The Calculator

All one has to do to see how much one can potentially save is enter the cost of the equipment you want to purchase and hit the “Section 179 Tax Savings” button. No other information is required to use the Section 179 Tax Savings Calculator. One can also input their effective federal tax rate to personalize the savings calculation (the default tax rate is set at 35% for businesses). The calculator will show you a summary of IRS Section 179 Write Off & Bonus Depreciation savings and how they affect the bottom line of your equipment costs. You can even print out this summary with any quote. We suggest that you do print out the summary and provide it to your tax adviser, who can confirm whether or not this type of tax application is best for your specific situation.