Structure Capital Purchases Now to Ensure Year End Tax Deductions

IntelliSystems CEO and Serotta Maddocks Evans, CPAs Issue Joint Alert to Encourage Local Businesses and Professional Practices to Get a Head Start

You hear it wherever you go every year at this time; in fact, you've probably said something similar yourself:

  • "Where'd this year go so quickly?"
  • "I can't believe that it's almost Christmas!"
  • "This year has just flown by!"

"Procrastination is almost never a good business choice," explains IntelliSystems CEO Kevin Wade. "But when it comes to putting off needed business purchases until next year, procrastination can prove very costly." Rick Evans, partner at Serotta Maddocks Evans, CPAs, adds: "All businesses need equipment on an ongoing basis, be it machinery, computers, software, office furniture, vehicles, or other tangible goods. It's very likely that your business or professional practice has purchased many of these goods during the past year, and will do so again and again. Section 179 of the federal tax code is designed to make purchasing that equipment during this calendar year financially attractive."

Mr. Wade also reminds the business and professional community that the timing is especially critical for some necessary software upgrades. "With Microsoft soon discontinuing technical support for Windows Server 2003---in July of 2015---those who wait until the last minute will lose the favorable tax deductions available this year." IntelliSystems is a full-service IT firm which also sells and services business telephone systems in addition to computers and software.

What purchases qualify for Section 179 tax benefits?

"Thanks to the recently updated tax deduction titled 'Section 179 election' (see www.section179.org for details), the Federal Government allows you to buy up to $25,000 in machinery, computers, software, office furniture, vehicles or other tangible goods and take the full expense deduction in the current year, thereby REDUCING your taxable income on your current year’s tax return" reports Mr. Evans. "But you have to act now, as once the clock strikes midnight on December 31st, Section 179 can’t help your 2014 profits anymore." Serotta Maddocks Evans, CPAs is one of Augusta's leading CPA firms. (www.SMECPA.com)

More about Section 179

This is a quick "big picture" overview of Section 179 and the impact of the various 'Stimulus Acts' of 2008, 2009, and 2010 have had on IRS §179 for the tax year 2013. The individual pages for each aspect go a little deeper into the details, but this page serves nicely as a quick primer.

  • Section 179 is a tax code created to help businesses. By allowing businesses to deduct the full amount of the purchase price of equipment (up to certain limits), Section 179 is a fantastic incentive for businesses to purchase, finance or lease equipment this year.
  • Section 179 is valid on most types of equipment. There is little sense in allowing a deduction on only obscure equipment, so Section 179 is aimed at general business equipment as well as off-the-shelf software. If you use it in your business, it probably qualifies.
  • Section 179 can greatly help your bottom line. By deducting the full cost, you lower the amount you pay for equipment and/or software substantially. And these benefits can be further expanded if you choose to lease or finance your equipment & software.
  • Section 179 is simple to use. All you need to do is buy (or lease) the equipment, and use a special IRS form.
  • Section 179 was enhanced for 2013. The various Stimulus Acts over the past few years have included special provisions for Section 179 and Bonus Depreciation, and greatly increased the limits on how much businesses can deduct. There is simply no better time than now to take advantage of Section 179 and Bonus Depreciation.

Using a $25,000 equipment cost for a sample calculation shows how taking advantage of the Section 179 Deduction can significantly lower the true cost of the equipment purchased, financed or leased. In the example, $25,000 in equipment purchased has a true cost of $16,250. That's $8,750 added to your bottom line. Would you like an extra "almost 9 grand" this year?

In order to qualify for the Section 179 Deduction, the equipment must be purchased, financed or leased and put into service by December 31, 2014.

About IntelliSystems

Founded in 1993, IntelliSystems is “The Small Business IT Department”, with offices in Augusta, Aiken, and Columbia. Featuring a "60 minutes or less" response time for most technology problems, they use a proactive approach to leverage a variety of tools to manage client IT systems resulting in less “fixing” of recurring problems that rob organizations of employee productivity. Specializing in business IT services, telecommunication systems, cabling and wireless contracting, cloud services, and backup and disaster recovery management, IntelliSystems strives to be a one call resource for IT, Internet, and telephone communications in both the CSRA and Midlands.

About Serotta Maddocks Evans, CPAs

Serotta Maddocks Evans, CPAs is an Augusta, GA based company that provides accounting, tax, audit, consulting and more to a wide variety of clients. At SME, we attempt to find solutions and present alternatives to problems instead of just answering inquiries. SME serves clients in a variety of industries including local governments, non-profit organizations, health care services, wholesale distribution, construction, retail, manufacturing, and professional and financial service providers.


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