For those who don’t know, I’ll recap Section 179 a bit essentially. It’s a small and medium business tax deduction meant to spur equipment purchases by these businesses. It accomplishes this by allowing a business to take a full deduction on qualifying equipment (instead of depreciating it over time.) This means if you buy (and put into service) a $10,000 piece of equipment right now, you can deduct that entire $10,000 from your gross income on next April’s tax return.
Pretty sweet, if you ask me.
The caveat is the equipment must be purchased (and put into service) by Jan 1, 2009. Basically, that means you have until the end of the year (which, if you haven’t looked at your calendar, is now definitely in sight.)
Now, I just mentioned that this is the year to take advantage of Section 179. That’s because the Economic Stimulus Act of 2008 greatly increased the limits of Section 179, and added a few other goodies to the mix. But these limits (and goodies) may not last much beyond this year, so if you were thinking about a purchase, now is the time, my friend.
In addition, if you finance the equipment (or lease the equipment), you could actually pay less in payments next year than the tax savings you get, making Section 179 an actual source of profit for many firms (who knew equipment financing and equipment leasing could be profitable?)
There’s a great informational website regarding Section 179 which should answer any questions you may have (it also has a pretty snazzy Section 179 Calculator.)
Ok, off to enjoy what’s left of summer!!