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Anya Ciecierski, CAL Business Solutions

Purchase New ERP Software Before the End of the Year for Tax Savings With Section 179 Deductions


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One of the most difficult obstacles businesses face is the burden of high taxes. Even a good year can be soured by unexpectedly high taxes. Fortunately, there are plenty of ways to get tax incentives that can help a business save money. Purchasing an ERP software system like Microsoft Dynamics GP, before the end of the year, might be one way you can save money at tax time.

Do you know about the Section 179 deduction that includes “off the shelf software”? Here are the details at a glance:

Section 179 for 2011 at a glance

  • 2011 Deduction Limit - $500,000 (up from $250k previously). Good on new and used equipment, including new software.
  • 2011 Limit on equipment purchases - $2 Million Dollars (up from $800k previously).
  • “Bonus” Depreciation - 100% (taken after the $500k deduction limit is reached). Note, bonus depreciation is only for new equipment. This can also be taken by businesses that exceed $2 million in capital equipment purchases.

The above is an overall, "simplified" view of the Section 179 Deduction for 2011. For more details on limits and qualifying equipment, as well as Section 179 Qualified Financing, please visit www.section179.org or consult your tax professional.

The provision, established by the U.S. government’s Economic Stimulus Package, allows companies that purchase computer software assets to accelerate depreciation of those assets as long as they are acquired and put into use before December 31, 2011. This can potentially reduce a company’s taxable income.

Using Microsoft Financing to buy Microsoft Dynamics GP, companies can also defer actual payments of ERP software until 2012, subject to credit approval. They may even be able to include additional non-Microsoft products in the financing agreement.

Whether you are dipping your toe into the ERP waters for the first time or diving in for a much-needed upgrade, now might be an ideal time to consider purchasing a Microsoft Dynamics ERP product. It may help you save big in the coming year, both in taxes and in your company’s management and performance.

Interested in the cost of Microsoft Dynamics GP? Check out our quick and easy Microsoft Dynamics GP Quick Quote Tool for an estimated cost of licenses, maintenance and implementation.

By CAL Business Solutions, Connecticut Microsoft Dynamics GP Partner

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