New law extends bonus depreciation and increased expensing for 2010

President Obama signed into law Sept. 27 the "Small Business Jobs and Credit Act," H.R. 5297, which allows businesses of all sizes to immediately write off 50 percent of the cost of depreciable property purchased and placed in service anytime during 2010. This prevision is a temporaryextension of the bonus depreciation provision included in both the 2008 and 2009 economic stimulus laws. The new law also includes a provision that increases Section 179 expensing for two years by increasing the expense limitation to $500,000 with a phase-out threshold of $2 million for years 2010 and 2011.

For a technical explanation of the new investment incentives, see pages 7 – 15 of the Joint Committee on Taxation technical explanation.