Save 35% on your new phone system between now and Dec. 15!

As the old saying goes, the only two things that are certain in life are death and taxes. But here's one more thing that we know for certain, if your business is not taking advantage of Section 179, you are missing out on a real improvement in your bottom line. So...

What is the Section 179 Deduction and why is Blue Ocean Technologies mentioning it?

Most people think the Section 179 Deduction is some arcane or complicated tax code or know nothing about it at all. Blue Ocean Technologies is always striving to provide as much value to our clients as we can. The end of the year is upon us and we felt compelled to remind you of this potential money-saving tax deduction. It really is simple, as the following will show you.

Essentially, Section 179 of the IRs tax code allows businesses to deduct the full purchase price of qualifying equipment purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from you gross income. It’s an incentive created by the US Government to encourage businesses to buy equipment and invest in themselves. It is sometimes referred to as the “SUV Tax Loophole” or the “Hummer Deduction” because many businesses have used this tax code to purchase qualifying vehicles (like SUV’s and Hummers.) 

Essentially, Section 179 works like this:

When your business buys certain pieces of equipment, it typically gets to write them off a little at a time through depreciation. In other words, if your company spends $50,000 on a vehicle, it gets to write off (say) $10,000 a year for five years (these numbers are only an example).

Now, while it’ true that this is better than no write off at all, most business owners would really prefer to write off the entire equipment purchase price for the year they buy it.

In fact, if a business could write off the entire amount, they might add more equipment this year instead of waiting. That’s the whole purpose behind Section 179. See the following graphic for an example of the savings that are available to you after the “Economic Stimulus ACT of 2008”. 

Lease and Section 179

Did you know that your company can lease equipment and still take full advantage of the Section 179 deduction? In fact, leasing equipment with the Section 179 deduction in mind is a preferred financial strategy for many businesses, as it can significantly help with not only cash flow, but with profits as well. 

Advantages of Leasing and Financing

The obvious advantage to leasing or financing equipment and still take full advantage of the Section 179 Deduction is the fact that you can deduct the full amount of the equipment without paying the full amount this year.

Material goods that generally qualify for the Section 179 Deduction

Please keep in mind that to qualify for the Section 179 Deduction, the below equipment must be purchased and put into use between January 1, 2010 and December 31, 2010

• Equipment (machines, etc.) purchased for business use.
• Tangible personal property used in business
• Business Vehicles with a gross vehicle weight in excess of 6,000lbs
• Computers
• Computer Software (off the shelf)
• Office furniture
• Office Equipment ----TELEPHONE SYSTEMS QUALIFY
• Property attached to your building that is not structural component of the building

2010 equipment Purchase:	$75,000
1st Year Write off: (Under the new law, $250,000.00 is the Maximum Section 179 write-off)	$75,000
Tax Savings: (Assume 35% tax rate. $75k x .35 = $26k)	$26,000
Total Equipment Cost: ($75k less all tax deductions of $26k)	$49,000

Take advantage of truly significant tax savings right now to help your business grow and move into 2011 in a strong position with a brand new phone system. Call us today 205.776.6900 for a quote for your business phone system needs or to update pricing on an existing quote you may be holding from us.

Ref.: http://www.section179.org/index.html