2013 is just around the corner – are you ready to finally manage your leads, your appointments, and your jobs?
It’s time for you to take control of your business.
To help you in this mission, we wanted to let you know about a special tax deduction available to small businesses toward the expenses of new software. improveit! 360 offers a system exclusively for remodelers, contractors, and home service pros that helps you manage every lead, create powerful reports, automatically send e-mails, get more referrals and repeat business and… run your company from anywhere with our mobile app!
And if you have our solution up and running before December 31, 2012, Section 179 of the IRS tax code allows you to deduct the costs of our system. This means that if you become a customer and use our software to help you manage your business, you can deduct the cost from your gross income. It’s an incentive created by the U.S. government to encourage business owners to buy equipment – including software – and invest in their companies.
Although large businesses benefit from Section 179, the original target of this stimulus legislation was much needed tax relief for small businesses – and millions of small businesses are actually taking action and getting real benefits.
Here’s How Section 179 Works:
When your home improvement business buys or leases certain equipment, it typically gets to write them off a little at a time through depreciation. In other words, if your company spends $50,000 on a machine, you would be able to write off $10,000 a year for 5 years (just as an example).
This is better than no write-off at all, but many business owners would like to write off the entire equipment purchase price the year they buy it.
If your home service business is able to write off the entire amount, there is an incentive for you to add more equipment during the year instead of waiting for another few years. That’s the purpose behind Section 179 – to help improve the economy with all the additional purchases. For most small businesses (adding equipment, software, and vehicles totaling less than $139,000 (the cap) in 2012), the entire cost can be written-off on your 2012 tax return.
Most tangible goods, including off-the-shelf software, qualify for the Section 179 Deduction. To qualify, the software purchased, financed, or leased must be placed into service between January 1, 2012 and December 31, 2012.
Section 179’s “More Than 50 Percent Business-Use” Requirement
The software must be used for business purposes more than 50% of the time to qualify for the Section 179 Deduction. Simply multiply the cost of the software by the percentage of business-use to arrive at the monetary amount eligible for Section 179.
Software and the Section 179 Deduction
Any “off-the-shelf” computer software that (a) is not custom designed, and (b) is available to the general public is qualified for the Section 179 Deduction in the year that you put the software into service.
What Software Qualifies
For basic eligibility, the software must meet all of the following general specifications:
- The software must be financed, leased, or purchased outright by you.
- The software must be used in your business for income-producing activity.
- The software must have a determinable useful life.
- The software must be expected to last more than one year.
In addition, these three specific stipulations must be met:
- The software must be readily available for purchase by the general public.
- The software must be subject to a non-exclusive license.
- The software must not have been substantially modified.
Basically, the software can’t be custom code.
There’s Never Been a Better Time to Take Your Business to the Next Level
Take advantage of the tax code and the stimulus program designed to help small business owners. Talk to a Success Coach (or call 866-421-3360) about getting our business management system up-and-running in time to make sure you can deduct the set-up fee and annual software license (if you purchase a year in advance.)
Also, keep in mind – we’re not tax experts and are passing on this information from the IRS, be sure to talk with your tax professional to make sure you’re eligible for all the benefits of Section 179. For more information, visit the Section179.org website!