Helping Companies Take Advantage of Significant Tax-Breaks for New Technology
We are helping customers take advantage of a large tax-break for small to mid-sized
businesses with Internal Revenue Code (IRC) Section 179. The tax benefit targets
businesses who are contemplating large equipment purchases, such as technology,
and significantly reduces the cost of purchasing such equipment. Section 179 allows
business owners to write-off the entire cost, up to $500,000, on new equipment purchases
made by December 31st, 2011.
Many Americans were left wondering how the Stimulus Package would have an impact
on their lives and Section 179 has answered that question for many business owners.
Creating significant savings on major purchases of equipment, software or phone
systems, the federal government has enacted this bill in an effort to spur business-to-business
spending. Right now businesses can expense the entire purchase price of qualifying
equipment/software/phone systems in the first year up to $500,000 (to be reduced
to $125,000 at the end of the 2011 tax year). Also slated to expire at the end of
the 2011 tax year is the 100% Bonus Depreciation, which will drop down to 50 percent.
For example, assuming you’re in a 35% tax bracket, a $45,000 purchase would drop
dramatically, and would cost approximately $29,250 after Section 179 has been applied
to the transaction. In a transaction like this, Section 179 would yield a total
savings of $15,750. While every transaction is different and tax professionals should
be consulted on specific situations, the potential rewards of this government program
has persuaded many business owners to seriously consider investing in new equipment
before year-end.
The one caveat associated with this powerful program is that the new equipment must
be in use by December 31, 2011 in order to qualify for the massive savings. This
year, Section 179 also extends to cover software purchases in addition to traditional
equipment. Many business owners have installed new business phone systems as a result
of this addition to the tax code, because recent breakthroughs in telecommunications
are enabling businesses to collaborate better, faster and more efficiently with
one another.
“We were stunned to find out that so many of our customers had not yet heard of
Section 179,” commented Warren Heuman, Vice President of CTS Technology Solutions,
Inc.. “We may specialize in delivering technology solutions to our customers, but
we treat our customers like partners. If we find something as powerful as this we
have always considered it to be our duty to communicate this information to our
customers. Our goal is to introduce our customers to technology that increases their
productivity, but more importantly increases their profitability . When an opportunity
like this comes along, we’re thrilled to skip discussions regarding technology,
and go straight to the part where our customers get to enjoy increased profitability.
That’s why we’re different and we plan on continuing to treat our customers like
gold.”