Year end is traditionally the time that many businesses consider making purchases to help offset taxes. In 2011, that may be more true than ever because this year, several special incentives are set to expire. So if you’ve been putting off purchasing equipment or software that you know you’re going to need in the future, now may be the best time to act.

Expiring Tax Incentives

• 100% Bonus Depreciation – The bonus depreciation deduction for qualifying property placed into service after September 8, 2010 and through 2011 was increased to 100%. Once the incentive expires the depreciation rate reverts back to 50% bonus depreciation.
• Section 179 Depreciation Provisions – The increase in expensing limits under Section 179d for 2011 at $500,000/$2,000,000 (equipment/property) will be phased out at the end of 2011. In 2012, the rates will reduce to $125,000/$500,000 (equipment/property) until December 31, 2012.
• 15 Year Straight Line Depreciation – This allows property owners and lessees to depreciate qualifying improvements to commercial office spaces, as well as restaurant leasehold improvements and new restaurant development.