Use the power of available deductions to boost your
business's bottom line in 2007. Purchase new or "new to
you" used business equipment now. Then place it in service
by December 31st to realize exceptional tax savings.
IRC Section 179 - What is it? Under the provision of
Internal Revenue Code Section 179, a business that spends
less than $500,000 this year on qualified tangible property
in 2007 may deduct the total cost of those assets, up to
$125,000. Input the cost of the equipment that you're
considering in the instant Section 179 Allowance Calculator
to find out the potential cash savings.
Designed as an incentive for economic growth for small to
medium sized businesses, Section 179 allows you to expense
the purchase price of your qualified equipment immediately
upon putting it into service. So, you see significant tax
savings now, rather than depreciating your newly acquired
assets over five or more years.
What Tangible Property Qualifies? Most new business
equipment will fall under the rule of Section 179.
Qualified equipment is defined in IRS Publication 946 and
includes such common and movable tangible property as all
kinds of machinery and equipment, as well as office
furniture, computers, printers, software and most vehicles.
Used equipment purchased from another party ' but not from
a company that is also owned by you ' can also qualify.
What if I spend more than $500,000? If your business spends
more than $500,000 on business equipment this year, you can
still leverage a tax savings. Each dollar over $500,000 you
spend, however, reduces the maximum Section 179 deduction
by a dollar. For example, if you spend $550,000, your
maximum deduction for 2007 would be reduced by $50,000.
This still allows you to deduct up to $75,000 of the cost
of your new equipment in the first year.
Note: The allowable deduction amount cannot reduce taxable
income below zero. The remaining value of your business
equipment can still be depreciated over the prescribed
recovery period.
According to the latest Small Business Research Board
study, "Taxes were the leading concern of business owners
during the second quarter of 2007 replacing health care."
And since taxes weigh so heavily, it is logical for
business owners to attempt to ease their tax burden. Which
is where section 179 comes into play.
What's the next step toward tax savings? Action now will
ensure the benefits of this tax opportunity to your 2007
business position. Purchase and place into service needed
equipment before December 31st to maximize your
deductibles. IRC Section 179 deductions can pave the path
to significant tax savings in 2007.
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Sean Marten is a Senior Credit Analyst at Crest Capital
http://www.crestcapital.com providing equipment financing
to small & medium-sized businesses at better rates while
eliminating the hassle often encountered with typical bank
financing
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