Section 179 Expense Deduction Increased. For 2003, 2004 and 2005, the Section 179 expense limit has been increased from $25,000 to $100,000. The phaseout for these years has been increased from $200,000 to $400,000.
The $100,000 and $400,000 amounts will be indexed for inflation for 2004 and 2005. The $100,000 inflation adjusted amount is rounded to the nearest $1,000. The $400,000 figure is rounded to the nearest $10,000. Also for 2003 through 2005, taxpayers can revoke a Section 179 expense election they have made for that period. However, once the election is revoked, it cannot be reinstated.
Another change is that off-the-shelf computer software will be considered qualifying Section 179 property for 2003 through 2005.
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