Sink Your Teeth Into This.

A bend in the road is not the end of the road... unless you fail to make the turn. ~Author Unknown
The Economic Stimulus Act and Section 179 “ The American Recovery and Reinvestment Act of 2009” has been officially extended. The Section 179 Deduction increases made available in the Economic Stimulus Act of 2008 through December 31, 2009, if you have purchased and installed the equipment.

With the current news that is all around us it is sometimes hard to justify opening our pocketbooks and investing in our companies. We all know that the best way to improve ourselves and our businesses is to invest time, energy and money in accomplishing our goals. As the year draws to a close you need to take a look and see what can be done to improve your business. The decision to improve may save you money. With the changes to the Section 179 Deduction made by the Economic Stimulus Act signed in February 2008 there are some exciting benefits for businesses.

Essentially, Section 179 works like this: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.

In fact, if a business could write off the entire amount, they might add more equipment this year instead of waiting. That's the whole purpose behind Section 179. See the following graphic for an example of the savings that are available to you.

Limits of Section 179
Section 179 does come with limits - there are caps to the total amount written off ($250,000 in 2009), and limits to the total amount of the equipment purchased ($800,000 in 2009.) The deduction begins to phase out dollar for dollar after 800k, so this makes it a true small and medium-sized business deduction.

However, in 2009, businesses that exceed the $250k deduction limit can take a bonus depreciation of 50% on the amount that exceeds the limit. And then also take normal depreciation on the rest. Nice.

Of course, we recommend you speak with your tax advisor on how these provisions can benefit you directly.

For more information online including a Section 179 Deduction calculator and a list of qualifying equipment visit http://www.section179.org/.

Most of us can read the writing on the wall; we just assume it's addressed to someone else. ~Ivern Ball

Dynamic Commissioning Solutions, inc. (DCSi)
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