equipment and machinery. Everything from chairs and desks to computer hardware and software would qualify. But instead of writing off the purchase over time (amortization and depreciation), business owners can do it all at once under Section 179 of the IRS tax code. If you’ve read any of my past blogs you know that I’m a huge fan of Section 179 deductions. It’s a great opportunity to help small businesses grow by purchasing equipment beneficial to the company, and Uncle Sam basically rewards you for doing so. Under new legislation, the amount was raised to $250,000 for 2008.
Make sure the one time deduction is right for you. “Let’s say I only had $1,000 in income last year and purchased a $5,000 asset. I might decide I can use some of those deductions in future years,â€ Schneier explains. If that’s the case, “you can decide to go with normal depreciate rules and write it off over a five-year period,â€ he adds.
Share your tax tips for maximizing your deductions, and check out tomorrow’s The Cutting Edge blog for more tax tips for small business owners.
Renita Burns is the editorial assistant at BlackEnterprise.com.