Less than 90 days left for healthy companies to invest in their future with purchases or leases
For several years, profitable small businesses have known they can receive an immediate same-year tax deduction for equipment purchases made below a certain threshold, as long as their company was profitable in that tax year. IRS Section 179 has offered increasing tax deduction amounts over the last few years and last year it was increased to $250,000, through the Economic Stimulus Act of 2008. In 2009, the American Recovery and Reinvestment Act (ARRA) extended this tax benefit through December 31st, 2009. An example illustrates this best:
Total capital equipment purchases made in 2009 $250,000
First year write-off ($250K max limit) $250,000
Tax Savings (Assumes 35% tax rate) $ 87,500
Net Cost for $250K value $162,500
So, if your company has enjoyed continued success like so many of our clients this year and is profitable, make sure to take advantage of this very special tax benefit and investment opportunity. You can purchase office equipment, computers, software, and other tangible goods. For IT investments such as computers, servers, networking equipment, and software, a business can also include installation and training costs. Furthermore, you can choose to either buy everything outright or lease the whole project. That’s right; a non-tax lease qualifies as well. As always, consult your own tax advisor before making any decisions, since each company is unique and Lanlogic is not a qualified tax advisor.
Lanlogic has taken advantage of this tax incentive this year by investing in more equipment in our data center to enable continued customer growth and data storage capacity. Before the year is out, we’re thinking about making further investments in our own future with additional software, laptops, servers, and other networking equipment. One decision we made earlier this year involves Microsoft Windows 7. We definitely consider Windows 7 “what Windows Vista should have been”. Although many clients upgraded to Windows Vista successfully, many are still running Windows XP. Now a couple of years later, Windows XP has reached its end of useful life (as of April 2009) and will no longer be supported or updated by Microsoft, except for an additional per incident cost. As a result, Windows 7 is the next logical step.