Congress Extends Tax Benefits for Business Property
Section 179 is the IRS code that allows a business to expense in the year purchased–rather than having to capitalize and depreciate over several years–most equipment it purchases. For example, if you buy $100,000 of equipment in 2010, you can deduct the full purchase price against income earned this year.
The maximum section 179 expense deduction you can elect for qualified section 179 property you placed in service in tax years that begin in 2009 remains at $250,000 ($285,000 for qualified enterprise zone property and qualified renewal community property). This limit is reduced by the amount by which the cost of section 179 property placed in service in the tax year exceeds $800,000
Depreciation limits on business vehicles. The total depreciation deduction (including the section 179 expense deduction) you can take for a passenger automobile (that is not a truck or a van) you use in your business and first placed in service in 2009 is $2,960 ($10,960 for automobiles for which the special depreciation allowance applies). The maximum deduction you can take for a truck or van you use in your business and first placed in service in 2009 is $3,060 ($11,060 for trucks or vans for which the special depreciation allowance applies).
Caution. These limits are reduced if the business use of the vehicle is less than 100%.