Section 179 Intro

These are a few of the highlights in our webinar Section 179 Tax Benefits and how it is used as leverage for IT purchases.

We have many customers and potential customers that are very indecisive about what they want to do about their IT assets. We as a company ourselves defer our own IT purchases because we typically want to use that cash for other things. We may want to spend it on marketing sales, career development for our team, building upkeep, or any number of other things; therefore, we tend to defer on IT expenditures. So what happens is we get on the fence, particularly at the year end, on what we want to do with cash.

Fortunately we are able to do some really cool stuff now with Section 179. We can essentially kill two birds with one stone! Specifically, we can take those IT purchases that we have deferred and can go ahead and start rolling those out while at the same time get a tax benefit - a very significant tax benefit - that would impact the owners of the organization.

Section 179 is an IRS tax code rule that allows businesses to deduct the full amount of the purchase price (currently up to $25,000 in the current year) of qualifying equipment and software purchased or financed during the tax year. For example, if you lease a piece of qualifying equipment you can actually deduct the full purchase price up to $25,000 from your taxable income, even though you don't fully pay for the equipment this year.

The whole point behind Section 179 is as an economic stimulus. It is a very specific tool that the government uses to encourage a company to invest in infrastructure. The government is giving you a deduction to encourage you to invest in those capital expenses which in turn will go to those companies that manufacture the hardware and software and then they are going to take that money and reinvest in the economy and hopefully have a multiplier effect.

As an IT firm we stay really focused on what works well in IT and we always keep a lookout for tax situations and places where we can reduce costs for our customers, but obviously you want to refer back to your CPA or your tax lawyer for any type of tax planning.

This and a lot more was featured in our webinar, Section 179 Tax Benefits: