When Planning for 2014 - Make Technology Purchases in 2013
As an entrepreneur and small business owner I have a tendency to focus on the immediate need or challenge at hand. However, I know that strategic business planning as well as financial planning are critical to long term success.
Here at P&L Technology we just wrapped up our annual two-day off-site retreat to address our internal outlook for the year ahead. Many businesses are participating in similar exercises and should be aware of changing tax codes that could impact forecasted technology purchases. The time to act may be sooner rather than later.
If a company is looking at near term capital purchases, now is the time to pull the trigger. The Section 179 deduction will drop from $500,000 to $25,000 in 2014. Essentially, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. It's an incentive created by the U.S. government to encourage businesses to buy equipment and invest in their business. But, that incentive will be reduced for 2014.
All businesses that purchase, finance, and/or lease less than $2,000,000 in new or used business equipment during tax year 2013 can qualify for the Section 179 Deduction at the higher level. Take advantage of this tax incentive now to reap maximum benefit.
Enjoy the holidays and cheers to 2014!
written by: Phil Lieber - 12/2/2013