Section 179

With the year end coming quickly, now is a great time to call on your prospects and propose some new solutions.

With the end of the year, a lot of IT departments will be looking to spend any remaining funds in their budgets. They do this so when the next year’s budgets come out, they do not get a large cut in their funding. Ask your prospects how you can help them today in providing a solution that will help them maintain their current budgets while also increasing efficiency and cutting variable costs!

There are also tax incentives out there for your customers to get equipment this year. Section 179 is a tool many companies can use to depreciate the full value of a solution you install this year.

Does your customer need the Section 179 write off but lacks funding until the start of the next fiscal year? Get a 90 day deferral out there. You can meet their budgetary needs as well potentially get them the depreciation they need in 2011!

Here is some additional information on Section 179:


Two congressional acts affecting Section 179 in a positive way for this 2011 tax year passed in late 2010 (The Tax Relief Act of 2010 and The Jobs Act of 2010). The newest changes are as follows:
•The Section 179 Deduction limit was increased to $500,000. The total amount of equipment that can be purchased was increased to $2 million. This includes most new and used capital equipment, and also includes software.
•The “Bonus Depreciation” was increased to 100% on qualified assets. However, this can be taken on new equipment only.
•When applying these provisions, Section 179 is generally taken first, followed by Bonus Depreciation – unless the business has no taxable profit in 2011.
•Section 179 can change yearly without notice, so it benefits you to take advantage of this generous tax code while it’s available. These limits are set to reduce and return to “normal” in future years – so you may wish to take advantage of Section 179 now before the enhanced tax deductions expire.

What’s the difference between Section 179 and Bonus Depreciation?
•The most important difference is both new and used equipment qualify for Section 179 Deduction, while Bonus Depreciation covers new equipment only. Bonus Depreciation is useful to very large businesses spending more than $2 million on new capital equipment in 2011; also businesses with a net loss in 2011 qualify to carry-forward the Bonus Depreciation to a future year.

Does the date of my purchase have an impact on the Section 179 Deduction?
•Yes. To qualify for the Section 179 deduction for the 2011 tax year, the equipment must be purchased or leased and placed into service between January 1, 2011 and December 31, 2011.

Offsite is not a certified tax professional. It is recommended that you consult with your tax professional.

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