2011 Tax Incentive on Hardware/Software

The federal government has extended Section 179 through the end of 2011 making it easier for hotels, and other businesses, to purchase new hardware and software such as Innovation’s ComXChange IP PBX.

It’s all explained in Section 179 http://www.section179.org/ and here are some excerpts taken from the site:

Essentially, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software 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 your gross income. It’s an incentive created by the U.S. Government to encourage businesses to buy equipment and invest in themselves.

Who Qualifies for Section 179?

All businesses that purchase, finance, and/or lease less than $2 million in new or used business equipment during tax year 2011 should qualify for the Section 179 Deduction.  If a business is unprofitable in 2011, and has no taxable income to use the deduction, that business can elect to use 100% Bonus Depreciation and carry-forward to a year when the business is profitable.

Find out more at http://www.section179.org/

Section 179 for 2011 at a glance:

  • 2011 Deduction Limit – $500,000 (up from $250k previously). Good on new and used equipment, including new software.
  • 2011 Limit on equipment purchases – $2 Million Dollars (up from $800k previously).
  • “Bonus” Depreciation – 100% (taken after the $500k deduction limit is reached). Note, bonus depreciation is only for new equipment. This can also be taken by businesses that exceed $2 million in capital equipment purchases.

The above is an overall, “simplified” view of the Section 179 Deduction for 2011. For more details on limits and qualifying equipment, as well as Section 179 Qualified Financing, please peruse this entire website.

For more information contact Innovation through our Website at www.innovationtw.com

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