Posts Tagged ‘Depreciation of machine tool fourth quarter’
Accelerated depreciation in the fourth quarter of 2004 taxes may provide important refuge for many job shops producing parts or tool and die shops, according to capitol equipment financing specialists Makino, a global provider of advanced machining technology.
Operations to invest in new technology equipment and receive delivery before December 31, 2004, refunds can view important personal and business owner in the spring of 2005. In some cases, the savings / corporate tax refund offset expenses for the first year associated with the operation of the machine.
After the terrorist act of 9 / 11, Congress passed a tax relief act in 2002 allowing companies purchase new machinery to immediately depreciate 30 percent of the value of the assets acquired. The remaining book value of MACRS depreciation would be in accordance with the guidelines of the Internal Revenue Service. In addition, the law allows a company to reach back five years (instead of three years) for a tax refund.
In order to stimulate the economy in 2004, Congress passed and jobs bill tax relief President Bush’s economic growth. This bill contains a new provision of 50 percent expensing for tools and other equipment ordered between May 6, 2003 and December 31, 2004, provided they are in service before December 31, 2004. This enhances and replaces the temporary assignment of 30 percent expensing enacted in 2002.
In addition, small businesses (those whose purchases of equipment of all kinds do not exceed $ 410,000) can repay the first $ 102,000 of an acquisition. Then be amortized over 50 percent of the remaining base of the machine and apply MACRS depreciation under IRS guidelines for the remaining value. In other words, a qualifying small business to purchase a $ 100,000 machine can spend it all in the first year.
A $ 200,000 machine could qualify for a first year deduction $ 158,000 or 79 percent of assets. A $ 300,000 machine could qualify for a deduction first year $ 215.147 or 71.7 percent of assets.