I received the following advice from a CPA friend and biking companion. As usual the government can not make the rules simple and straight forward. For example what does the line at the end of pragraph one mean? “Certain changes have also been made to the revocation rules and the treatment of “off-the-shelf” computer software.” And how does that effect my technology purchases?
Arcane rules aside the fact is you can save significant tax dolars if you buy and place new technology in service before the end of the year. Now is the time to plan and place your orders, it will be too late the last week of December.
Section 179 Depreciation – For tax years 2010 and 2011, the maximum amount of Section 179 deduction has doubled from $250,000 to $500,000, and the phase-out threshold has increased from $800,000 to $2,000,000. Additionally, up to $250,000 of “qualified real property” may be treated as Section 179 depreciable property (certain restrictions apply). Certain changes have also been made to the revocation rules and the treatment of “off-the-shelf” computer software.
Bonus Depreciation – The Act extends 50% bonus depreciation through tax year 2010. Bonus depreciation applies only to property whose use begins with the taxpayer in the year the property is placed into service.