Use the Economic Stimulus Act to fund critical infrastructure improvements.

With 2009 winding down, companies are taking in all the money that they can, and budgeting for the future. Many companies are unaware of the tax deductions that they qualify for when entering this planning process, especially those outlined in Section 179. “Section 179" refers to Section 179 of the Internal Revenue Service Tax code, and can prove extremely profitable for companies. It allows them to deduct for certain purchases and expenses – in some cases, before they are even paid in full. Many see this as the best feature of the economic stimulus act, as it’s great to have the option of not making the full payment before year end so that you can opt for an equipment lease if cash flow is an issue.

Another benefit of the economic stimulus act is enhancements to Section 179 that allow for higher dollar limitation for equipment purchased before December 31, 2009. In addition, this deduction is not based on the number of days this equipment has been in service. Another perk that comes with Section 179: it allows a business to take a current year deduction on an equipment purchase instead of depreciating the newly acquired equipment over the course of several years. The bonus being that more money is back in your pocket, faster.

If you’re looking to make a big (or even small) equipment purchase, do it sooner than later! To find out more about Section 179, click here.

It’s smart to speak with your tax adviser to figure out what moves will be most financially advantageous to your company, and you may find yourself with a cash flow advantage in 2010.

James Cranshaw
Sr. Sales Engineer