In an effort to get businesses spending money again, the government earlier this year renewed incentives to buy equipment and make improvements. If you have taxable income and the ability to fund expenditures, here is your chance to reduce the present value of the taxes you pay on profit.

• Increased expensing limitations for 2010 and 2011 of the Section 179 deduction: An expense deduction is allowed for businesses which choose to treat the cost of certain qualified property, called section 179 property, as an expense rather than a capital expenditure. For qualifying property placed in service during the taxable years 2010 and 2011, the new law increases both the maximum amount of the deductible expense under IRC Section 179, as well as the statutory phase-out amount. The provision also expands the definition of IRC Section 179 property to include the following types of real property: qualified leasehold improvement property, qualified restaurant property and qualified retail improvement property. Section 402, Temporary Extension of Increased Small Business Expensing, of the Tax Relief Act of 2010, further amended IRC Section 179 for tax years 2012 and 2013.
• Additional first-year depreciation for 50% of the basis of certain qualified property: Generally, businesses are allowed to recover the cost of capital expenditures over time through depreciation expense. IRC Section 168(k) allows for additional first-year depreciation, for 50% of the basis, of certain qualified property placed in service after December 31, 2009. The new law extends the additional first-year depreciation deduction to qualified property acquired and placed in service during 2010. Section 401(a), Extension of Bonus Depreciation, of the Tax Relief Act of 2010, extends the additional first-year depreciation deduction to include tax years 2011 and 2012.

Talk to your accountant about whether these new incentives can provide purchase benefits for your digital signage or other equipment needs.