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.