For small businesses this year, New Year’s Eve won’t just be a time to reflect on their progress over the past 12 months. If you’re looking to improve your business, it will also be the last day for companies to qualify for the Section 179 tax deduction.
Section 179 was created as an economy stimulus to encourage businesses to invest in themselves through the deduction of the full price of (qualifying) new or used equipment. However, starting in 2014, the benefits will be greatly reduced and qualified purchases will change. When determining how much of a deduction a company is qualified for, simply multiply the cost of the equipment/software by the percentage of business-use to arrive at the monetary amount eligible for Section 179. Keep in mind – you have to use the equipment for business more than 50% of the time!
WHY IS THIS SO IMPORTANT?
Deductions reduce taxable income and decrease the amount of tax you owe to the government thus, increasing your bottom line! Many people don’t know about them or know how to take advantage of them.
WHAT’S THE BOTTOM LINE?
If you are planning on a technology upgrade in the very near future consider making that purchase prior to the close of 2013 to take advantage of this great tax benefit. Almost all types of “business equipment” qualify for 179 (computers, servers, phone systems, etc.). See the chart below for a side-by-side comparison of just how great 2013 benefits are versus 2014.
|
2013 |
2014 |
|
| Deduction Limit |
$500,000 |
$25,000 |
| Purchase Limit |
$2,000,000 |
$200,000 |
| Phase Out |
$2,500,000 |
$225,000 |
Start your New Year off with a bang – capitalize on the 2013 deduction rates, and contact Teltek to request a quote. Teltek, a Certified Avaya Business Partner, NEC Dealer, and Microsoft Partner can provide, install and repair business phone systems & computer networks, run voice and data cabling, and coordinate local, long-distance, and internet service providers. Be sure to ask about Avaya and NEC end of year specials, as well as leasing and financing promotions from Teltek’s preferred partners!
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Information for this posting was obtained at section179.org, please contact your tax accountant to find out more about your individual business scenario.