The Small Business Jobs & Credit Act of 2010 provides business
owners additional tax deduction and depreciation opportunities
through December 31, 2010.
Tax benefits extended: what they mean to your business
The Tax Code Section 179 deduction for qualified equipment has
recently been increased to $500,000. This means businesses can write
off up to $500,000 of qualified equipment within the 2010 tax year.
Equipment must be placed in service by December 31, 2010, but the
deduction may apply to equipment ordered in 2009.
• The deduction begins to phase-out dollar for dollar after $2 million
of qualified equipment is purchased during 2010. Equipment
acquisitions totaling $2.5 million or more do not result in any
Section 179 deduction.
• A 50% bonus depreciation deduction is included in the Act plus the
normal accelerated depreciation on the balance of the cost applies to
qualified new equipment acquired and placed in service during 2010.
• $1 buyout leases and EFAs qualify for Section 179 benefits.
Qualified equipment under Section 179 includes:
• Equipment (machines, etc.) purchased for business use
• Tangible personal property used in business
• Business vehicles with a gross vehicle weight in excess of 6,000 lbs
• Computers and computer software (off the shelf)
• Property attached to the business building that is not a structural
component of the building
For additional information, please visit or contact the IRS
helpline at 800-829-4933.

Important Equipment Tax Benefits
Cost of equipment $600,000
1st year write-offs
• Section 179
• Bonus depreciation
• Normal 1st year depreciation2
(based on 7-year asset life)
Total deduction in 1
st year $557,145
Marginal tax rate assumed 35%
3 $195,000
Bottom line equipment cost
after tax savings
1 50% bonus depreciation after Section 179 deduction.
2 14.29% depreciation based on a seven-year asset life.
3 Tax savings are assuming a 35% tax bracket.