The recently enacted 2010 Small Business Jobs Act (2010 Act) includes a wide-ranging assortment of tax breaks and incentives for small businesses. For asset-based trucking companies, the following should provide significant tax planning opportunities in the near-term:
Enhanced small business expensing (Section 179 expensing)
Small business taxpayers can elect to write-off the cost of certain capital expenses in the year of acquisition in lieu of recovering these costs over time through depreciation. Prior to the 2010 Act, taxpayers could expense up to $250,000 of qualifying property, subject to a dollar-for-dollar reduction on total purchases over $800,000 (ceiling). Under the 2010 Act, taxpayers can expense up to $500,000 with a ceiling of $2,000,000. In addition, certain qualified real property can be considered eligible for expensing, limited to $250,000 of the total $500,000.
Extension of 50% bonus first-year depreciation
In previously enacted legislation, businesses were allowed to more rapidly deduct capital expenditures. This applied to most new tangible personal property, and certain other new property, placed in service in 2008 or 2009 by permitting the first-year write-off of 50% of the cost. The new law extends the first-year 50% write-off to qualifying property placed in service in 2010 (2011 for certain long-lived property).
This is just an overview of some of the new provisions of the 2010 Small Business Jobs Act impacting trucking companies. Please contact John Popies at firstname.lastname@example.org or Dan Phillips at email@example.com for more information.
Schneider Downs provides accounting, tax, wealth management and business advisory services through innovative thought leaders who deliver the expertise to meet the individual needs of each client. Our offices are located in Pittsburgh, PA and Columbus, OH.
This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax-related matter.