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Senate OKs Section 179 Deduction; Act Quickly To Claim By Year's End

With just shy of 2 weeks left until the end of the year, Congress has finally made it official: The IRS Section 179 tax deduction limits that were scheduled for a major haircut this year have been restored to previous limits, and it's retroactive through all of 2014 for purchases up until December 31.

The Senate on Tuesday approved a bill pushed through the House of Representatives 2 weeks ago that keeps the deduction levels intact; you can now still deduct the full purchase price of a piece of equipment, machinery or other big-ticket item in a few categories, up to $500,000. In addition to machinery, the deduction covers computers, "off-the-shelf" computer software for business use, office furniture and equipment and other business vehicles and "tangible personal property used in business," according to Section179.org.

"The Tax Extenders Bill passed by the House on Dec. 3, 2014, was voted on and passed by the Senate on Dec. 16, 2014, retroactively expanding the Section 179 deduction limits thru 12/31/2014," according to a report on Section179.org. "Only this 2014 tax year will be covered by this measure - therefore it is a good business decision for many to buy/finance equipment immediately to make the December 31, 2014 cutoff for the write-off provisions. Technically, the bill is a one-year, retroactive extension of the tax breaks, even though it only lasts through the end of the month."

But, if you're claiming the deduction, for which the Senate also reinstated the 50% bonus depreciation provision, you better hustle. You'll have to apply for Section 179-qualified financing immediately if you're going to make the year-end deadline.

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