Tax laws that can save money?

It may be hard to believe, but the government actually created some tax laws that can save you money instead of taking it out of your pocket. Some of you who are tax and economy savvy may have noticed that the government passed the Economic Stimulus Act of 2008, which contained several tactics for trying to stimulate the downturn in the economy we’ve suffered across the US this year. One of those tactics was Section 179. Now I am the first to admit that I am NOT an accountant, and I need to be clear that you need to do your own research and find the specifics of how this tax break can be applied to your business.

To paraphrase all the legal and accountant jargon, essentially Section 179 allows a business to depreciate an additional 50% of the cost of an asset acquired and placed into service in 2008 in that year with the remaining basis depreciated in accordance with the statutorily prescribed recovery period.

To make it simple, if you buy $10,000 of software this year, and install it before the end of 2008, you can depreciate $5,000 this year, instead of having to amortize that cost over a longer time period as most tax laws dictate (usually 3-5 years). Additionally the provision states that the business equipment (software) can be purchased or financed, which is important too, because you can get it purchased today pay for it over time, but get the maximum tax advatage today.

This is huge for companies that that need extra room in their tax profile as we reach the end of the fiscal year. So if you are considering acquiring some new technology, and preferably some Autodesk software is in the mix, you’ll want to take a close look at section 179, and see how it can save you money, and aid in your end of year budgeting.

For more information, please go to www.section179.org/section_179_deduction.html