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Great Tax Credit For Your 2010 Business Purchases
If you made equipment purchases or leases in 2010, you are in luck! And, if you've held off on making purchases, now might be the time to finally pull the trigger.
Tax benefits, including the Section 179 provision that aided businesses in acquiring new equipment in 2008 and 2009 were extended into 2010, with the allowance doubled. Even better news is that, the extension is now good through 2011.
Business are now allowed to expense 100% of up to $500,000 worth of purchases for your purchases – meaning that, instead of slowly depreciating that purchase over several years, you can deduct the entire expense for the whole tax year if your equipment is purchased and put into service by the end of that purchase year.
Whom to thank? IRS Section 179, one of the more straightforward and beneficial tax incentives around for small business. Section 179 of the IRS tax code offers huge incentives to small businesses to help you cope with the high costs associated with keeping your technology up-to-date. Recent changes apply to your 2010 return.
Given today’s economy, a good number of companies are sitting on the fence waiting to see what happens before making technology buying decisions. During these economic times, when your business is not moving or expanding, buying new technology equipment may not seem like a sound business move. However, as your technology advisor, we want to share some time-sensitive information that could help incentivize you to make wise technology investments before the end of this year
So just how compelling are the benefits of Section 179 to you, as a customer? For example: let’s say you’re thinking of buying $15,000 of computer equipment. If your business is taxed at 35%, you will generate $5,250 in tax savings this year ($15,000 x 35%). In other words, your net investment in the new computer equipment will only be $9,750 if you purchased and installed it before the end of the year.
These purchases could include software, servers, desktops, laptops, printers, routers, firewalls, and even current hardware leases you may be paying. A brand new router can make a tremendous difference in the speed of transferring information because power supply and throughput has advanced greatly over the last year.
And, if you didn't get everything you needed during 2010... not to worry. Uncle Sam has now extended this great tax credit for the year 2011. So now is a great time to start planning for purchases for 2011.
Tax laws change often, and particularly in the past several years, Congress has extended and amended various elements of the tax code to help stimulate business activity. We can’t be sure what the tax code will look like for 2012, but we’re pretty sure that now is a good time to make a big purchase.
At IntegrIT Network Solutions, we’re (of course) more than happy to make recommendations about how to add new equipment to your office and gain a tax write-off. But we aren’t tax advisors, so be sure to consult with a professional who’s familiar with your situation.
IMPORTANT NOTE: All figures used above are merely examples and are based on assumptions that may not apply to your business or to your lease. This is not tax advice. Please consult your tax advisor to be certain as to how Section 179 will apply to your specific situation. To see how Section 179 can benefit your specific needs for a technology solution, please contact one of our IntegrIT Network Solutions, Inc. account representatives at 866-578-6220.
Learn more about the author, Julie Rice.
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