Posted: February 2011
Section 179 of the US IRS tax code has recently been modified to encourage businesses to buy equipment and invest in themselves.
What is the IRS Section 179 Tax Deduction?
- Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software which was purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income.
What are the limits?
- There are caps to the total amount written off ($500,000 in 2011), and limits to the total amount of the equipment purchased ($2,000,000 in 2011). The deduction begins to phase out dollar-for-dollar after $2 million is spent by a given business, so this makes it a true small and medium-sized business deduction.
Which businesses qualify?
- All businesses that purchase, finance, and/or lease less than $2 million in new or used business equipment during tax year 2011 should qualify for the Section 179 Deduction.
What goods qualify?
- Most tangible goods, including “off-the-shelf” software, as well as business-use vehicles (restrictions apply) qualify for the Section 179 Deduction. For basic guidelines on what property is covered under the Section 179 tax code, please refer to this list of qualifying equipment. Also, to qualify for the Section 179 Deduction, the equipment and/or software purchased must be placed into service between January 1, 2011 and December 31, 2011.
As an IT solution provider, we know that investing in technology is critical to the growth of your business. And as a small business, we understand the challenges of balancing and stretching your investment dollar. Although we are NOT tax advisors, we strongly suggest that you contact a qualified tax professional to investigate if the above is applicable to your business.
We invite you to call us at 682-4990 or Email Us if you have any about this article..
- The information provided here is based on information taken from http://www.section179.org
- Please consult with your qualified professional concerning your specific tax situation.