Description: Allows an increased section 179 deduction up to $35,000 on purchases of certain depreciable property, such as equiment and machinery.

Note: Only applicable in EZs and RCs (cannot be used in ECs). The RC Asset must be acquired by the taxpayer by purchase between January 1, 2002 and December 31, 2009.

Applicable IRS Tax Form: Form 4562

Applicable IRC Publication: Publication 946

Example : Leslie runs wholesale florist operation in an EZ. She purchases refrigeration equipment, work tables, a cash register, delivery van and a desk for a total of $65,000. Without the EZ tax incentive she could only expense (take an immediate deduction) for $24,000 and she would have to depreciate the remaining $41,000 over the time period assigned by the Federal tax rules. With the EZ tax incentive, she will be able to take an additional immediate deduction of $35,000, bringing her total deduction for the year to $59,000 and only $6,000 will have to be depreciated over time. That additional $35,000 in deductions will reduce the amount of taxes she pays that year. If she is paying taxes at 35% rate, the savings would be equal to:

$35,000 x .35 = $12,250