Tax Breaks on Software Upgrades and Interest Free Financing

Tax Breaks on Software Upgrades and Interest Free Financing

As a business looking to invest in new software and technology upgrades, you might need to make the upgrade sooner rather than later.  Section 179 tax code may allow you to receive deductions on software and technology upgrades.

According to Fox Business, Section 179 may allow a business to expense purchases of their capital assets, creating rules that effectively write off technology upgrades to their filings.  The tax rule can allow software to be written off immediately, which can save you major funds, instead of taking long-term depreciation expenses over time.

Engineering News-Record reports that a new change to the rule may take effect next year, changing the way Section 179 will help.  You may be able to currently deduct the full price of software up to $500,000 from gross income with a $2 million limit, but this aspect of the tax code expires on December 31, 2013.

ENR reports that deductions may look to drop significantly, as low as $25,000 next year.  With this news, now would be the best time for you to invest in your business.  Future tax incentives are unlikely, and according to a news source, from January – June 2013, the value of 14 different types of equipment increased by a collective average of 1.6%.

If you finance a piece of qualifying software with Marlin Equipment Finance, you may be able to deduct the Full Amount of the software (up to $500,000) without paying the full amount this year.  The amount you save in taxes has the potential to be greater than what you pay in the first year of a finance agreement.

Stu Sable
Marlin Equipment Finance

*Equipment and business industry piece brought to you by Marlin Equipment Finance, leaders in equipment financing. Marlin is a nationwide provider of equipment financing solutions supporting equipment suppliers and manufacturers in the security, food services, healthcare, information technology, office technology, and telecommunications sectors.
**Before making any decisions, be sure to consult with your CPA or other qualified advisors.

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