Tax Savings

To encourage investments by small businesses, legislation was passed that will increases the ability of small businesses to immediately deduct the cost of machinery, equipment, and other qualifying property. For 2009, the American Recovery and Reinvestment Act (Recovery Act) increased the amount that a small business could expense from $133,000 to $250,000. The Small Business Jobs Act (Jobs Act) further increased this amount to $500,000 for 2010 and 2011. Although this amount would have fallen to $25,000 in 2012, last December’s Tax Relief Act increased the 2012 amount to $125,000.

Source: US Treasury Secretary minutes.

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