Tax Incentives

If you have been thinking about purchasing new laundry equipment or opening a new laundry, then this is definitely the year to do it, because the government is going to give you a very generous tax deduction in 2012 (a tax deduction which is scheduled to be drastically reduced in 2013). Both the 'Tax Relief Act of 2010' as well as the 'Jobs Act of 2010' that passed in late 2010 affected Section 179 in a positive way for this 2012 tax year. Following are the highlights for the 2012 tax year:

2012 Deduction Limit = $139,000

Section 179's deduction limit after adjustment for inflation has increased to $139,000 (maximum allowance would have been only $25,000 prior to the new legislation). Section 179's threshold for total of equipment & software that can be purchased has increased to $560,000 (threshold would have been only $200,000 prior to the new legislation).

2012 Bonus Depreciation = 50%

The new law allows 50% “Bonus Depreciation”- new laundry equipment purchased and placed in service in 2012 can now be 50% expensed (with Bonus Depreciation), rather than deducting the value over a number of years. For example, without the extension of Bonus Depreciation, new laundry equipment costing $100,000 would have only provided a 2012 depreciation deduction of 20 percent, or $20,000. Under the extension for 2012, first year depreciation can be 50 percent, or $50,000.

There's never been a better time to purchase new equipment for a new or existing coin/card laundry or on-premise laundry.

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This information is general in nature and purchasers are encouraged to seek an experienced tax professional when considering tax planning and implementation.