Back on November 24, 2008 we blogged about Section 179 and the tax advantages available to businesses. These same advantages are still available for 2009!

From section170.org:

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 meant to give you an example.)

Now, while it’s 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.

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 your gross income. It’s an incentive created by the US Government to encourage businesses to buy equipment and invest in themselves.  

So what qualifies? Here is a list from the same website:

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, 2009 and December 31, 2009.
Equipment (machines, etc) purchased for business use
Tangible personal property used in business
Business Vehicles with a gross vehicle weight in excess of 6,000 lbs (Section 179 vehicle deductions)
Computers
Computer Software (off the shelf)
Office Furniture
Office Equipment
Property attached to your building that is not a structural component of the building (i.e.: a printing press, large manufacturing tools and equipment)
Partial Business Use (equipment that is purchased for business use and personal use – generally, your deduction will be based on the percentage of time you use the equipment for business purposes.)

The example on the Section 179 website shows a savings of $119k on a $400k purchase! Please check with your accountant and make the best decision for your business. Here’s to a great 2010!