By: Lane Batson
As of 2015 Section 179 of the tax code has been moved back from $500,000 to $25,000. For now that means that small to midsize companies will not be able to fully depreciate equipment over $25,000. In 2014 you had the option to take full depreciation on that new Doble, Omicron or Megger. This year, as they did last year, congress will not decide until later in the year on if to raise the limits. You can go to www.section179.org and get an insightful read into how the law can help or hurt you.
Do you know what your utilization rate is on your equipment? If do not know what your utilization rate, exact rate not a “guesstimate” from the technicians, you will not know how fast you will recoup that initial investment. If you only have a guess as to how much you utilize a piece of equipment you are taking a risk of throwing away capital on a piece of equipment that has the potential of taking you five years to fully depreciate. At the end of the five years you will have a piece of equipment that will be difficult to recoup any value. Look at www.ecptracer.com for some answers.