Shopping Deadline Extended

Farmer Iron

One benefit of the fiscal cliff tax deal was an extension of Section 179 deduction, and more.

Published on: January 11, 2013

Digging through all of the last-minute/late-night deal-making Congress went through to avoid jumping off the fiscal cliff takes time. During last week's Farm Futures Business Summit, Management Coach Darrell Dunteman provided a great look at some key issues from the deal farmers should know about. And there's Section 179 news.

A few weeks ago I issued a kind of warning, since Section 179 was about to expire. It didn't, so your shopping can continue. Interestingly every time I do one of those stories near year-end, Congress extends the program (you're welcome).

THINKING BIG? That bigger Section 179 deduction got extended as did the bonus depreciation, at least for 2013.
THINKING BIG? That bigger Section 179 deduction got extended as did the bonus depreciation, at least for 2013.

Dunteman told audience members that Section 179 remains at $500,000 for 2013 only, but is retroactive to 2012. And we're retaining that 50% bonus depreciation on new purchases for 2013. This incentive program has been a boon for farmers interested in updating inventory since there's an immediate tax benefit and incentive.

Who knows if Congress will extend the program beyond 2013, or what other program they may come up with. The Section 179 depreciation offers a nice benefit, especially if you have the income to handle the tactic.

Spending-spree buying isn't how farmers work. However, a little help to make sure you're keeping up with the latest, most-productive technology remains important. Turns out Congress - for now - apparently agrees.

So, sit down with your dealer to make plans for any equipment you might need for 2013 or even 2014 (if you can have it on your firm by 12/31/13 and "in service.") And talk with your tax adviser now to maximize that deduction for your 2012 activities.

The equipment industry is responsible for a lot of jobs - voting jobs - and Congress is aware of that. While there were permanent tax code changes in the fiscal cliff deal, for now Section 179 remains the temporary benefit you want to maximize when available.