Huge Tax Savings!

Does saving thousands of dollars per year sound like a positive financial strategy for your business? With Section 179 of the IRS’ Economic Stimulus Act, that is exactly what will happen! Huge tax savings are only a call or click away! Make your purchase decisions quickly as these tax credits expire on December 31, 2008!

Section 179 allows businesses to deduct the full purchase price of qualifying equipment purchased or financed during this specific tax year. Simply stated, anything you buy for your business, that qualifies, can be deducted fully. The more you buy, the more savings you will see. In the past, businesses could write off purchases a little at a time, with small amounts being deducted each year. For example, if you purchased a piece of equipment for $20,000, you would have to deduct small amounts each year, whereas now you can deduct the entire amount at one time.

This amazing deduction act does come with it’s limits though. There is a $250,000 cap to the amount written off, and an $800,000 limit to the total amount of the equipment purchased. This limit really does make it a small or medium sized business deduction. However, businesses that exceed the $250,000 deduction can take a bonus depreciation of 50%. These
businesses can also take a normal depreciation on the rest.

What qualifies?

Section 179 was designed specifically for businesses, and that means that nearly all equipment you will need for your business qualifies for this special deduction. All business owners purchase items throughout the year that will help to make their businesses run more smoothly, ranging from computers to furniture. Most material products that are purchased between January 1, 2008 and December 31, 2008 will qualify, but you might still need to refer to our list (see below) just to make sure.

• Equipment (refrigerators, ice machines, etc.) purchased for business use

• Tangible personal property used in business

• Business vehicles with a gross weight in excess of 6,000 lbs.

• Computers

• Computer software (off the shelf)

• Office furniture

• Office equipment

• Property attached to your building that is not a structural component of the building

• Partial business use (equipment that is purchased for business and personal use)

This act can change from year to year, so it would be in the best interest of your business to order equipment and other such products now, while Section 179 is offering such a generous deduction. Check out the type of equipment you need, or want, and then use theTax Deduction Calculator to see how much you could actually save. It’s guaranteed to be a pleasant surprise!!

What About Leased Equipment?

Good news here too! Even when leasing equipment, your business can still take full advantage of Section 179. The best part about leasing is that you can make smaller payments, yet still write off the entire amount. In essence, you may actually be able to write off the whole $50,000 worth of equipment that you are leasing, and not even have to pay that much back! What an amazing opportunity to generate extra revenue for your business.

In order to ensure that you are getting the most out of your leased equipment, we recommend you speak to a leasing expert at either Crest Capital or Enodis Financing. These financing companies specialize in equipment financing for all types of business equipment purchases.

Please note that we no longer offer financing through Crest Capital as of May 26, 2009.

Special Deduction Zones

Section 179 offers businesses located in specific zones an increase in deduction amounts. If your business is operating in one of the following zones, you could qualify for this increased deduction:

• New York Liberty Zone

• Enterprise Zone and Renewal Community Businesses

• Gulf Opportunity Zone (areas affected by the recent Gulf area hurricanes)

New York Liberty Zone

The New York Liberty Zone is classified as the borough of Manhattan, however all of Manhattan is not covered, so you should check with the IRS website about your specific location. If your business is covered in this special zone, your additional deduction is $35,000 or the cost of the Section 179 Property located within the Zone and placed into service during the year.

Enterprise Zone and Renewal Community Businesses

These zones are generally metro type areas that need to be revitalized; or small areas that are in need of more jobs. If your business qualifies for this specific area, the limits are raised by $35,000 or the cost of the Section 179 Property located within the Enterprise Zone or Renewal Community Business Area.

Gulf Opportunity Zone

If your business is located within the Gulf Opportunity Zone, you will most likely qualify for a much larger deduction. This zone is defined as the areas affected by hurricanes Katrina, Wilma, or Rita. FEMA (the Federal Emergency Management Agency) has determined these exact areas, and they qualify for raised deduction limits of $100,000 or the cost of the Section 179 Property located within the Gulf Opportunity Zone.

What Does This All Mean?

Section 179 simply means that now would be the best time to act on any purchasing needs you may have. Why not take advantage of the savings while they last? Your business will thank you.

*The content of this article was valid until DECEMBER 31, 2008. Being a time sensitive announcement, the offers in this article no longer apply.