Tax Savings…Use it or loose it

by Larry Emmott on October 2, 2009

in General

(Of course all this is presented here with the usual gibberish about me not being an accountant and you should check with your professional tax advisor before making any investment decisions and all that.)

Section 179 of the tax code allows us to write off up to $250,000 as an expense this year on any capitol purchase placed in service before December 31, 2009.

That means you can buy a CAD-CAM machine or an i-Cat and write it all off, right now, this year. Not depreciating it over the next seven to ten years. (That ain’t no small change.)

Several important features to keep in mind:

The law is in place for 2009 and has not yet been extended to 2010. Speculation varies as to what the new administration will do.

If the law is extended that will be nice for next year however the chance to get a write off benefit for 2009 will have passed. You either use it or lose it.

The law states the new purchase must be in service before the end of the year. That means a purchase does not qualify if you simply place an order in December. So for many items you need to be planning now to place an order before November to insure delivery and installation before December 31.
(Check out the previous post for some ideas on CAD CAM ROI)

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