You wouldn’t know it, but if you’re a small business owner this holiday season, Santa Claus will be coming down your chimney with a big gift bag that has your name on it. It’s all courtesy of the IRS. If you’re the owner of a small or medium-sized business, your holiday shopping this season can actually help you in next year’s tax season.
As a governmental measure to help stimulate the economy, up to $500,000 of equipment costs for your business can be written off during tax time. Section 179 of the tax code lets you write off the full cost of many pieces of business equipment that you buy during the rest of 2010.
Section 179 allows you to write off equipment costs right away instead of having to depreciate them over the course of who knows how many years. You can realize the full tax advantage immediately instead of long after purchasing that new machine, vehicle or desk. And even if you miss out on all the great deals this holiday season, this incentive will still be around during 2011 as long as total equipment costs don’t exceed $2 million.
It’s your holiday gift from Uncle Sam, delivered by Santa on a sled powered by reindeer IRS agents. But writing off business equipment expenses isn’t the only incentive you have this holiday season. The IRS can also let you settle your tax debt for less than what you owe, avoiding wage garnishments and the interest that keeps adding up.
And that’s a holiday present we can help you get your hands on this season.
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