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Anya Ciecierski, CAL Business Solutions

Last Month to Save Money on ERP Software Purchases with 2010 Small Business Job Act (Especially for Small Manufacturing Companies)


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    Want to save money on your ERP software purchase?  In September 2010 Congress passed the Small Business Jobs Act in an effort to strengthen small businesses, which are often responsible for much of an economic recovery (when it happens). If you are considering an ERP Software purchase Obama’s 2010 Small Business Job Act bill has provisions that will save your business money if you purchase software in 2010 vs. 2011. 

    The bill includes an extension of the 50% bonus depreciation provision for all businesses, regardless of size, that is effective for qualifying assets purchased in 2010.

    It also includes several other tax provisions targeted toward small businesses that would:
    (1)        expand the one-year carry-back for general business credits to five years for sole proprietorships, partnerships, and non-publicly traded corporations with $50 million or less in gross receipts for the previous three years (sunset 12/31/2010);
    (2)        provide a 100% exclusion on gain from the sale of small business stock acquired after the date of enactment in 2010 and held for at least five years (sunset 12/31/2010); and
    (3)        increase the Section 179 expensing limitation to $500,000 for 2010 and 2011.

    These benefits apply to companies in all industries. But according to the Huffington Post article, Small Business Jobs Act: Real Value to Small Manufacturers, manufacturers with revenues under $50 million should pay close attention to one feature of the act — the elimination of the AMT (Alternative Minimum Tax) barrier when it comes to business tax credits.

    For a typical small manufacturer with about $30 million in revenue, the federal R&D credit can range from $100,000 to $200,000 or more. Even if the business lost money during the current recession and is not paying tax, it can apply those credits as far back as 2005 to claim refunds. If you’re a manufacturer, this could be an important credit, and one that could possibly free up capital that could be invested in technology improvements

    For more details on this bill read the CCH Tax Briefing on Business Jobs Act of 2010

    Remember, these benefits expire on December 31, 2010.  So if you are interested in buying an ERP software package like Microsoft Dynamics GP, you have only a few weeks left. If you want to find an ERP Partner that can quickly determine your needs and recommend the right solution, contact us at CAL Business Solutions at 860-485-0910 x3102.  We have specific experience implementing ERP/accounting software systems for distribution and manufacturing companies in Connecticut and Massachusetts.

    (By the way, this is not intended as legal or financial advice on the tax credit and how it might benefit your firm. Consult your attorney or tax advisor for specific information.)

    By CAL Business Solutions, Connecticut Microsoft Dynamics GP Experts

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