Special thanks to a member of the Print4Pay Hotel, who reminded me of the Section 179 of the IRS Tax Code. I'll use his quote here. "Time is limited as the asset must be placed in service by the end of the year. Your customer can capture this deduction under a dollar out lease thus getting a size able reduction in tax liability for 2008 without any money out of their pocket".
There are many small business owners who either forget or are unaware of the advantages of IRS Section 179. Our job is too remind them of the special advantage at this time of year. Personally, I will use this close to give my customers a sense of urgency to buy before the end of the year.
4 comments:
Art -
the economic stimulus package has some advantages attached to it as well...I believe depreciation and tax based...worth checking
Small businesses benefit from Section 179 deduction
Bankrate.com
Typically, if property for business has a useful life of more than one year, the cost must be spread across several tax years as depreciation with a portion of the cost deducted each year.
But there is a way to immediately receive these income tax benefits in one tax year. The provisions of Internal Revenue Code Section 179 allow a sole proprietor, partnership or corporation to fully expense tangible property in the year it is purchased.
And tax-law changes over the past few years have made this option much more appealing by dramatically increasing the amount that can be written off immediately. Changes first made in 2003 and then extended in 2006, mean that businesses can write off more of their capital expenditures through 2009.
Enhanced section 179 expensing now is at the base level of $100,000 with that level indexed for inflation for the last several years. This is four times more than the previous-law limit of $25,000. In addition, the investment limitation also has been increased to more than $400,000 and it, too, is indexed for inflation.
These changes mean that in 2006, a business can expense $108,000 in capital expenditures up to an overall investment limit of $430,000.
Eligible property
Property that may be written off in the tax year of purchase, rather than depreciated over the asset's useful life, includes:
Machinery and equipment
Furniture and fixtures
Most storage facilities
Single-purpose agricultural or horticultural structures
Also, the definition of eligible section 179 property was expanded by the 2003 legislative changes to include off-the-shelf computer software. Previously, it had to be written off over three years.
The IRS says ineligible property includes:
Buildings and their structural components
Income-producing property (investment or rental property)
Property held by an estate or trust
Property acquired by gift or inheritance
Property used in a passive activity
Property purchased from related parties
Property used outside of the United States
Do you have anything to add on the stimulus package?
Go here also http://www.crestcapital.com/tax_deduction_calculator
http://www.section179.org/section_179_leases.html
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