a tax break that has been temporary will be permanent in the new tax bill dec 23 2015tucked inside the mammoth tax and spending bill passed by congress this month is a muchanticipated provision that will lock in a large tax break for smallbusiness capital investments that has been temporary until nowthe break is intended to make it more affordable for small companies to buy up to 500000 a year worth of equipment like computers machinery and vehiclesknown as the section 179 deduction the tax provision allows qualifying capital items to be written off immediately on a businesss taxes instead of being depreciated over a number of years that has the effect of lowering a businesss taxable profits sometimes significantlythe deduction is essentially limited to small and midsize companies it begins phasing out when a company spends more than 2 million a year on qualifying purchases and is eliminated entirely for those that spend more than 25 millionjerry kortesmaki the owner of london road rental center in duluth minn relies on the deduction to stock up on equipment for his machinery and party supplies rental business this year he is using it to help pay for some 200000 in new goods including chairs a miniexcavator four trailers an insulation blower and a sewer cameraive been able to grow my company very quickly because ive been able to reinvest whatever i made in buying more equipment to rent said mr kortesmaki who has 11 fulltime workers at his 13yearold companythe deduction works like this if a company has a 90000 profit and decides to spend 50000 of it on new computers the company would normally write off the cost of the equipment gradually deducting a portion of it each year over the span of the computers useful life but section 179 allows the business to deduct the entire 50000 cost at once in the year the equipment is purchased reducing the companys taxable profit to 40000 the deduction cannot exceed a businesss total net incomenearly all small businesses even the very tiniest should consider taking advantage of the deduction said tanya ouellette an accountant with raiche company in dover nhit doesnt have to be a huge piece of equipment she said i tell my clients if you bought a new apple laptop were going to take a 179 on thatfor equipment dealers like sherry wuebben who sells farm machinery the permanence is as big a deal as the tax break itself for the last few years she and her customers have watched nervously as the years final days slipped away wondering when and whether congress would renew the deal that many business owners rely on to finance their bigticket purchaseswe would get phone calls every day from customers about it wondering if they should go ahead and buy said ms wuebben who is an owner of st joseph equipment in la crosse wis the uncertainty weighed very heavily on themimagecreditmark kegans for the new york timessection 179 was once a