Section 179 and Bonus Depreciation

A tax provision that many small businesses take advantage of every year is the ability to write off in full the purchase of machinery and equipment (including heavy vehicles) instead of depreciating it. This is known to accountants as the Section 179 deduction.
The limit for this write-off had been temporarily increased to $250,000 for 2008 and 2009, but because Congress was preoccupied with health care at the end of last year, the limit automatically reverted back to $134,000 for 2010.
Congress can still take action to restore the higher limit, and many analysts predict that they will do so. And there is a good chance that they will make the remedy retroactive to January 1.
Another depreciation break that expired at the end of 2009 was a 50% bonus—an option to write off half of certain new machinery and equipment in the year of purchase. That too has a strong chance of being revived. If it is restored, it can be used on top of the expense deduction described above, such as for purchases over the $134,000 (or $250,000) limit.