Senate Tax Bill 2015 Information Relevant to Equipment Purchases



The Senate again passed the tax bill that allows for a $500,000 expense level as well as a 50% bonus depreciation on equipment purchases.

The following information is part of the Senate Tax Bill passed in 2015:

Tax Provisions

    • Section 179 is extended permanently with an annual expensing level of $500,000. The ability to expense under Section 179 begins to phase out on a dollar-for-dollar basis when annual purchases of qualified equipment reach and exceed $2 million. Both the $500,000 expensing level and $2 million phase-out level are indexed for inflation. This provision also is retroactive to Jan. 1, 2015. This provision will provide an estimated $77 billion in tax relief over the next 10 years to small businesses using Section 179.
    • Bonus depreciation is extended for property acquired and placed in service during 2015 through 2019 with an additional year for certain property with a longer production period. The bonus depreciation percentage is 50 percent for property placed in service during 2015, 2016 and 2017, and phases down to 40 percent in 2018 and 30 percent in 2019. The provision continues to allow taxpayers to elect to accelerate the use of alternative minimum tax (AMT) credits in lieu of bonus depreciation under special rules for property placed in service during 2015. The provision modifies the AMT rules beginning in 2016 by increasing the amount of unused AMT credits that may be claimed in lieu of bonus depreciation.
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