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Crunch Time for 2012 Computer and Business Software Tax Benefits

Solution providers and their small-business customers have a few more weeks to take advantage of Section 179 deduction limits for 2012 taxes.

In an image gallery on Windows 8 PCs for small business, Microsoft noted a late November blog entry from the U.S. Small Business Administration. In that entry, the SBA calls out the 2012 "Section 179" deduction limits.

According to the blog:

"Under the American Recovery and Reinvestment Act, Section 179 of the tax code provides tax benefits for equipment purchases made before the end of the year. Typically when you purchase an item for your business, you can claim a tax deduction for it. But fixed assets are not counted in the year of purchase. Instead, they must be depreciated over a number of years. Section 179, however, allows you to fully deduct the cost of assets such as computers, furniture, certain business software, vehicles, manufacturing equipment and more in the year of purchase -- up to a certain amount."

Key words: computers and business software. This has been a popular section of the tax code for Microsoft partners for years both for internal use and to help spur sales with customers (see this 2006 RCP article.)

The limit for 2012 for an individual piece of equipment was $139,000, which would buy a pretty powerful system at current prices. The equipment purchased must be in place by Dec. 31, 2012. See more complete details here.

Posted by Scott Bekker on December 18, 2012 at 11:58 AM


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