This year, 2013, is fading fast and there are now less than 60 days remaining in the calendar year. Time to think about last minute tax preparation and structuring before the year expires. For small businesses, there is one deduction they should strongly consider taking advantage of this year; bonus depreciation.

Here is how it works. Normally, when a business makes an investment in major equipment, machinery, computer systems, etc. they are allowed to depreciate the assets over a set period of years. In 2001, bonus depreciation was introduced. This allows the business to depreciate a large percentage of the asset (subject to limitations) during the year of purchase and the remaining amount over subsequent years.

The terms and conditions of bonus depreciation have been tweaked a number of times over the years. For tax year 2013, IRS Code Section 179 allows a business to expense up to 50% of the asset’s value and a total of $500,000 in qualifying assets. If no changes are made to this section of the tax code, this number will drop down to $25,000 in 2014.

You may remember the big “fiscal cliff” debate at the end of 2012. It was during these negotiations that most of the expiring tax provisions from the past decade were decided for future years. This year, the politicians have upcoming negotiations on spending, entitlement reform, and raising the debt ceiling so it is unlikely that they will revisit the bonus depreciation provision in the tax code.

For small businesses considering large investments to upgrade their equipment, now is the time to take action. Take a look at all of your systems and see if there are any major investments you will be making in the next 1-3 years. If possible, move up your schedule and arrange to make these purchases before December 31. If you are unclear about which investments may qualify for bonus depreciation in 2013, speak to your accountant for further details.