Software and Taxes

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Submitted by Raybyrnes on July 18, 2008 - 10:59pm

Seems like there are many high income earners who complained about the economic stimulus act becaseu they did not pick up a check. But little is said about Section 179.

Section 179 allows for the Immediate Expensing of items such as software rather than having to depreciate the item. The limit was raised from 125 K to 250 K. That is a huge incentive to invest in infrastructure if you area business

I don't have a problem with this but I hate when the same people are bitching about the fact that they didn't pick up a couple of hundred yet they are now getting an immediate write off of up 250 K.

So here it is. I have a business and I was planning a software upgrade. I wait until the end of the year and rather than pay the 250K I elect to lease it at %K a month or whatever and I still get to expense the full 250 K.

I anticipate seeing a lot of people taking advantage of this before year end. Will be interesting to see how people work it.

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That's interesting. On the
Submitted by gandalf on July 18, 2008 - 11:52pm.

That's interesting. On the corporate side, I believe our software purchases are expensed at the time of purchase, as opposed to capitalizing them as a durable equipment asset and following a depreciation schedule. Makes sense.

I don't think any of the
Submitted by nostradamus on July 19, 2008 - 12:15am.

I don't think any of the bitching was sincere; I didn't get the refund and was still bitching but only facetiously. Yes, business owners get the better deal for sure.

I believe the tax breaks go
Submitted by Raybyrnes on July 19, 2008 - 9:17am.

I believe the tax breaks go further by also allowing the immediate expensing of up to 25000 for vehicle purchases over 6000 GVW(grand vehicle weight) coupled with the MACRS (modified Accelerated cost recover system) depreciation.

In essense the government is incentivising you to purchase heavier less fuel efficient vehicles. I understand that this was nt the original intent of the law. (it was initially put in place for farmers but why wouldn't our elected officials enacts changes to curtail this behavior. Very frustruting to see things from this standpoint.

Yeah, I was aware of the
Submitted by gandalf on July 19, 2008 - 5:01pm.

Yeah, I was aware of the heavy vehicle tax break. It's retarded given the current geo-political situation. (Disclaimer: I'm for reducing our dependence on foreign oil.)