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Technology Tax Savings

Friday, November 14, 2014
Are you looking for ways to save on your business taxes? Aren't we all! Well, now is the time to start thinking about the Section 179 tax break that can be applied to your businesses computer software and hardware year end purchases. This deduction will only be available through December 31, 2014 and can be used to deduct the full purchase price of leased or financed equipment from your gross income instead of requiring the cost to be depreciated. This tax code also allows up to a 50% bonus depreciation on these purchases in the first year and the remaining 50% to be taken during the normal schedule.

Use this handy calculator to see how much you could be eligible to save.
Limit Extension Waiting on Senate Approval
The only question that still remains is the actual limit on how much can be deducted (see our update below). In previous years, the deductible amount has been $500,000 but this amount expired on January 1st, 2014. Right now, the amount that can be deducted has been reduced to $25,000. However, provisions are in place and a bill to extend the $500,000 limit is awaiting Senate approval. Because the midterm elections are now over, we are hoping to see the Senate approve this extension any day now.

What Should You Do Now?
Schedule time to talk with your financial advisor or accountant to determine how your business can best utilize this tax break on your year-end technology hardware and software purchases.

Begin planning your technology purchases for the current $25,000 amount and be prepared for this amount to go up. Stay tuned to www.section179.org for updates as they become available. Also, keep a look out for our December newsletter as we will include a Section 179 update. If you have any questions please don’t hesitate to call your IT Resource sales rep, we are here to help you!

*Update
The House of Representatives voted last Wednesday to approve a package of tax breaks which included expanding the Section 179 tax deduction to $500,000. Their approval has been sent on to the Senate where it is expected to be voted on later this week. Please remember if you haven't already, make an appointment with your financial advisor or accountant to see how your business will best benefit from this tax break. It's very likely that the $500,000 expansion will pass later this week, however for now, you can count on deducting the full cost of qualifying computer hardware and software purchases from your 2014 taxes for up to $25,000. Don’t wait until the last minute to make these purchases as the equipment must be purchased and put into use by December 31, 2014. Make sure to check www.section179.org this week for the official announcement and check out the 2014 Section 179 Tax Deduction Calculator to calculate your potential dollar amount savings.
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