Buy or Lease Machines – Bonus Depreciation & Section 179 Expensing

The Protecting Americans from Tax Hikes (PATH) Act Enacted December 2015 provides TAX INCENTIVES FOR MAZAK MACHINES

50% BONUS DEPRECIATION EXTENDED THROUGH 2017

  • Bonus Depreciation – 1st Year Bonus Depreciation Deduction of 50% is available through December 31, 2017 for NEW machines. (Does not apply to used machines.)
  • The bonus depreciation deduction is not capped at a certain dollar level of qualified capital expenditures.

SECTION 179 EXPENSING MADE PERMANENT

  • Section 179 expensing – The Section 179 expensing limit is $500,000, with a dollar-for-dollar phase out of the deduction beginning once qualified expenditures exceed $2,000,000.
  • The increased 179 expensing limit is permanent effective January 1, 2015. This deduction applies to new and used machines.

EXAMPLE OF FIRST-YEAR DEPRECIATION CALCULATION

$500,000 machine purchase/qualified expenditures

Section 179 Expensing $500,000
Total depreciation $500,000
Tax savings at 35% Tax Rate $175,000

 

$1,000,000 machine purchase/qualified expenditures

Section 179 Expensing $500,000
50% depreciation $250,000
14% regular depreciation $35,000
Total depreciation $785,000
Tax savings at 35% Tax Rate $274,750

 

For questions, contact Bruce Hill at (859) 342-1901 or BHill@MazakCorp.com. We can structure loans, or lease/purchases that keep these incentives available for you. Also, please discuss with your tax advisor to understand the specific impact to your business.

 

About Mazak Corporation

Mazak es líder en el diseño y manufactura de máquinas herramientas para soluciones productivas. Comprometido con ser un socio con clientes con tecnología innovativa, su planta de clase mundial en Florence, Kentucky, produce más de 100 modelos de centros de torneado, máquinas multitarea y centros verticales de maquinado, incluyendo modelos 5 ejes. Inversión contínua en tecnología en manufactura le permite a la planta Mazak iSMART de Kentucky ser una de las mas avanzadas y eficientes en la industria, proveyendo productos confiables y de alta calidad a través de su práctica de Producción Bajo Demanda. Mazak mantiene ocho Centros Tecnológicos a través de Norte América para proveer apoyo local en aplicaciones, servicio y ventas a sus clientes. Para más información en productos y soluciones Mazak, visite www.mazakusa.com o síganos por Twitter y Facebook.