Tax Benefits Of Technology Purchases

I.  What is Section 179?
II.  How to Use it to Your Advantage
III.  Example
IV.  One Step Further

WHAT IS SECTION 179?

We’ve all heard of it. Chances are people have tried to explain it multiple times in different ways. We know it is somehow related to a business’ tax liability. But do we really know what Section 179 means and how it can benefit you as a business trying to keep up with technology in these tough times?

First, let’s start with a very clean and clear definition of what the term “Section 179” is referring to. Tax benefits, including the Section 179 provision that aided businesses in acquiring new equipment in 2008 were extended to 2009 when President Obama signed into law the American Recovery and Reinvestment Act (ARRA) on February 17th, 2009.

Under Internal Revenue Code Section 179, businesses are allowed to expense up to $250,000 on most equipment or software placed in service during the tax year 2009. Additionally, you are able to expense up to 50% of the remaining figure under the depreciation bonus provision.

According to the Monitor Daily (www.monitordaily.com), the Associated Equipment Distributors has sponsored a website that explains the provisions in more detail and provides a tax calculator (www.depreciationbonus.org) to illustrate examples of deductions.