Section 179 Expense for Farmers

The section 179 expense deduction allows persons to elect to deduct the cost of certain property used in a trade or business instead of claiming depreciation. For federal tax purposes, for tax years beginning in 2008, the maximum section 179 expense deduction is $250,000. This limit is reduced by the amount by which the cost of section 179 property placed in service during the tax year exceeds $800,000.

For Wisconsin tax purposes, the amount that may be expensed under section 179 is limited to $25,000, and the phase-out threshold is $200,000. However, an exception is provided for farmers.

Effective for taxable years beginning in 2008 and 2009, persons who are actively engaged in farming may claim an increased section 179 expense deduction. The amount that may be expensed for tax years beginning in 2008 under section 179 is limited to $115,000. The phase-out threshold is $460,000. These amounts will be indexed for inflation for tax years beginning in 2009.

Persons who claim the section 179 expense deduction must file Wisconsin Schedule I to account for the difference in the amount allowable for federal and Wisconsin tax purposes.

Last updated March 6, 2009