The Section 179 Deduction – What’s In It For Me?

The Section 179 Deduction – What’s In It For Me?

Knowing that the present state of the economy won’t last forever, many retailers are looking a making hardware and software infrastructure changes now as the economy starts to improve.

The Section 179 Deductions for 2011 are:

2011 – Deduction Limit is $500,000 (up from $250,000 previously).  This is good for
new and used equipment, including new software.

2011 – Limit on equipment purchases – $2 Million dollars (up from $800,00 previously).

Bonus Depreciation (for new equipment only) – 100% (after the $500,000 deduction limit has been reached.

What does this mean for my bottom line?

Let’s assume that you were purchasing new servers, software, registers (including peripherals) for number of your existing stores, or new stores.

2011 Equipment Purchases:                                      $100,000
First Year Write-off:                                                   $100,000

Total First Year Depreciation:                                                0
(20% work be normal for a first year).

Tax Savings:                                                             $35,000

(Assume 35%, Tax Rate $100,000 X 35% = $35,000)
Total Equipment Cost:                                                  $65,000  

What would this kind savings mean for my business?

  • A raise for you and/or other key employees.
  • The annual salary for a full-time employee, or the annual wages for a number of part-time employees.
  • Monies to pay down debt or to purchase new product lines.
  • More money for services such as advertising and promotion.
  • Money for capital improvements.

If you would like more information on just how you can utilize this section 179 Deduction, please contact the CCS Retail Systems Sales Department.


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