If you’ve read here at all this year, you know that I champion businesses taking advantage of the Section 179 tax deduction. And here in the final few weeks of 2008, I’m going to champion it some more, because there’s scant time left for you to take advantage of this deduction for the current tax year.
See, in order to take the Section 179 deduction, you need to buy and put the equipment in use by midnight, 12/31. So when you hear the words Happy New Year, it’s too late (so you may as well party hearty, because you missed it!)
Now, the operative phrase here is put the equipment in use. This means, unlike other tax deductions, just buying it isn’t enough. You have to actually put the equipment into use before the end of the year. This means hooking up the printer, installing the software, getting the machine working, etc etc.
I won’t lie to you it’s doubtful the government is going to send someone over to watch and make sure the equipment is operative by 11:59pm on 12/31/2008 (in fact, those guys are off and are probably already partying to the hilt), but take it from Fletch here, be honest because depending on the equipment, you may have to (at some point) show that it was operative.
Of course, there’s even more reason to pay attention to the timeframe this year. The Economic Stimulus Act of 2008 increased section 179’s limits and there is no better year to take advantage of this tax break. So put down the letter to Santa, put off the New Years plans for a few minutes, and take a look at what equipment you may need and can realistically get operating by New Years Day. These tax savings just might make your year!