Effective as of 09/27/2010, H.R. 5297 (the Small Business Jobs and Credit Act of 2010) had a substantial (and welcome) impact on Section 179. The biggest impact is that it increased Section 179′s limits, almost doubling them.

This should mean a substantial boost to your bottom line this year. But to get the deduction for tax year 2010, you have to act now, as once the clock strikes midnight on 12/31/2010, Section 179 can’t affect your 2010 profits anymore.

In what has come as a welcome surprise to many business owners, H.R. 5297 (aka The Small Business Jobs and Credit Act of 2010) which was signed into law contains several substantial changes to Section 179, the ever-popular business equipment tax deduction.

“Section 179 was given a nice boost in the past few years, but those boosts were set to expire at the end of 2010” reported Chris Fletcher, Section179.Org’s spokesperson. “But now, not only were the prior higher limits extended for 2010 and beyond, they were made even bigger.”

Here are the following Section 179 changes:

• An increase of the total amount available for deduction to $500,000 (up from $250,000)
• An increase to the total amount of equipment purchased to $2 million (up from $800,000)
• The above numbers are to be in effect for 2010 and 2011
• In addition, the bill also extended the “50% bonus depreciation” to tax year 2010 (it was rescinded earlier this year, but has been restored)

This is definitely very welcome news to small businesses everywhere. Section 179 has always been extremely popular, and there was real fear that it would be reduced after 2010. This is because for months, there was no indication any changes were coming. But now with the passage of HR 5297, The Small Business Jobs and Credit Act of 2010, Section 179 has not only been extended, it’s been substantially increased.

For additional information, the www.section179.org website offers plain-English information regarding Section 179. See your accountant to learn how this tax incentive can benefit your business.

To find an outline on the benefits found in HR 5297 Small Business Jobs Act of 2010, check out Stacie Clifford Kitts’ Tax Blog – Stacie’s More Tax Tips.