Bill's Storage Tips

Customers don't have to settle for depreciating equipment over several years. With the Section 179 deduction, you may be able to elect to deduct the full cost of new machinery and equipment in the first year. The Hiring Incentive To Restore Employment Act of 2010 extends the $250,000 Section 179 first-year depreciation write-off by one year to cover tax years beginning in 2010. For qualifying purchases, this is one of the best tax breaks available today, yet many business owners fail to take full advantage of it.

Let's say you spend $100,000 on equipment this year. With the section 179 election, you can write off the entire $100,000 in one year rather than depreciating it over several years. This includes machinery, computers, copiers, fax machines, telephone systems, office furniture, software, and of course, mezzanine or rack purchases. Consult your tax professional to determine qualifying equipment.

Without Section 179, the money spent to purchase business equipment or software is treated as a capital expense and may have to be recovered over a period of years through depreciation and amortization.

The Hire Act also extends the $800,000 phase-out threshold by one year to cover tax years beginning in 2010. If a taxpayer adds qualifying property in excess of the $800,000 threshold, the $250,000 Section 179 allowance begins to be phased out (reduced or eliminated). For more information on combining the two tax breaks for assets placed in service by December 31, 2010, consult with a tax advisor.

Remember, in 2010 Section 179 will allow customers to deduct from their tax liability the FULL PURCHASE PRICE of equipment purchases up to $250,000. It's an incentive created by the US Government to encourage businesses to buy equipment and invest in themselves. A qualified tax advisor can provide all the details and determine if the extended Section 179 deduction can work for you. You may be able to fully utilize the tax break this year and be ready for growth in 2010 and beyond.

Visit http://www.section179.org for more information.

To view other Storage tips, please click on a PDF below

Elevate your business with a mezzanine (PDF - 50KB)