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2012 Year-End Business Tip: Depreciation

Posted by McDonald & Osborne Posted on Oct 13 2015

If you are purchasing assets with useful lives of 20 years or less (machines, equipment, etc), try to place them in service by December 31, 2012. After 2012, 50% bonus depreciation is scheduled to end and many feel it won’t be revived. In addition, Section 179 expensing is also available for assets placed in service during 2012, up to $139,000. The expensing in lieu of depreciation phases out dollar for dollar once over $560,000 of assets are placed in service.

Be cautious though when placing assets in service at year end. If 40% of your total assets purchased during the year are placed in service during the fourth quarter, regular depreciation is figured on a quarterly basis. Therefore, assets you buy in late 2012 will get 1.5 months of depreciation instead of 6 months.

For questions and concerns regarding depreciation and small business tax planning, be sure to give us a call.

Stephen Osborne

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