Tax Credits that benefit businesses
On December 16, 2014 the U.S. Senate passed a $42 billion package of tax incentives. It revives dozens of lapsed breaks for 2014. This may have an impact for companies who acquired software products this year. And there is still time to make purchased and put equipment in place in 2014 as tax credits are set to expire in two weeks.
The Section 179 tax deduction was one of the tax credits that is now on its way to President Obama’s desk for approval. It lets business deduct the purchase price of many types of equipment that is used for business. Over the years, Section 179 tax credit has helped entrepreneurs and long-established business owners throughout the country write off a big portion of their equipment and technology purchases. IRS set up the Section 179 tax credit limit to $25,000 as of January 1st 2014. This represented a significant decrease from last year’s limit of $500.000 total in 2013.
If the President approves Section 179 extension, business owners will be able to deduct up to $500,000 worth of qualifying equipment and property that was bought (or financed) and put into business use during 2014. This will represent an increase from $25.000 tax credit setup in the beginning of the year.
Properties that qualify for tax credits
- Tangible personal property.
- Qualified leasehold improvement property.
- Machinery and equipment.
- Research Facilities.
- Agricultural structures.
- Off-the-shelf computer software.
Properties that no not qualify for tax credits Section 179 deduction
- Land and Improvements
- Leased property, unless it is used for manufacturing
There is still time to upgrade your software and improve your payment processing systems. Printech offers secure payment software CheckPlusCFO that can automate Accounts Payable operations and issue checks and ACH payments efficiently. With the Section 179 the software investment can qualify for tax credits as off-the-shelf computer software placed in service during the tax year. The computer software is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. It includes any program designed to cause a computer to perform a desired function. However, a database or similar item is not considered computer software unless it is in the public domain and is incidental to the operation of otherwise qualifying software.
By extending the tax breaks through 2014, Congress did the bare minimum necessary to avoid creating a major disruption to the 2015 tax-filing season or saddling taxpayers with unexpectedly higher bills, as reported by Bloomberg Business Week.
There are many companies that finance equipment financing. With their help businesses can acquire software and properties that qualify for Section 179 tax credits and take advantage of this extension. See offers from Check Credit Capital that provides financing services and calculate the potential savings from using tax credits from Section 179 for 2014 and other finance companies.