LIVONIA — Technology Solutions LLC, a provider of unified communications, announced this week that the company is helping customers take advantage of a large tax-break for small to mid-sized businesses with Internal Revenue Code Section 179.
The tax benefit targets businesses who are contemplating large equipment purchases, such as technology, and significantly reduces the cost of purchasing such equipment.
Section 179 allows business owners to write-off the entire cost, up to $500,000, on new equipment purchases made by this Dec. 31. Part of the American Recovery and Reinvestment Act, better known as the stimulus package, Section 179 is meant to create significant savings on major purchases of equipment, software or phone systems, an effort to spur business-to-business spending.
Right now businesses can expense the entire purchase price of qualifying equipment, software and phone systems in the first year up to $500,000 (to be reduced to $125,000 at the end of the 2011 tax year). Also slated to expire at the end of the 2011 tax year is the 100% Bonus Depreciation, which will drop down to 50 percent. For example, assuming you’re in a 35 percent tax bracket, a $45,000 purchase would drop dramatically, and would cost approximately $29,250 after Section 179 has been applied to the transaction. In a transaction like this, Section 179 would yield a total savings of $15,750.
While every transaction is different and tax professionals should be consulted on specific situations, the potential rewards of this government program has persuaded many business owners to seriously consider investing in new equipment before year-end.
The one caveat associated with this powerful program is that the new equipment must be in use by Dec. 31 to qualify for the massive savings. This year, Section 179 also extends to cover software purchases in addition to traditional equipment. Many business owners have installed new business phone systems as a result of this addition to the tax code, because recent breakthroughs in telecommunications are enabling businesses to collaborate better, faster and more efficiently with one another.
“We were stunned to find out that so many of our customers had not yet heard of Section 179,” said Steve Futrell, President of Technology Solutions LLC. “We may specialize in delivering technology solutions to our customers, but we treat our customers like partners. If we find something as powerful as this we have always considered it to be our duty to communicate this information to our customers. Our goal is to introduce our customers to technology that increases their productivity, but more importantly increases their profitability. When an opportunity like this comes along, we’re thrilled to skip discussions regarding technology, and go straight to the part where our customers get to enjoy increased profitability.”
Technology Solutions provides voice and data networking equipment and services for businesses in Michigan and nationwide. More at www.ts-llc.com.