The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (H.R. 4853) was signed into law by President Obama on Dec. 17, 2010. Included in this legislation is a benefit regarding the purchase of certain assets used in a business.**
The legislation allows taxpayers to take a deduction for 100% of the cost of equipment acquired from Sept. 8, 2010 through Dec. 31, 2011. To be eligible for the 100% bonus depreciation, the equipment must have a recovery period of 20 years or less. Generally, network and telephony equipment will meet these requirements and qualify for the 100% bonus depreciation as most equipment has a recovery period of five or seven years. Additionally, the equipment must be new and the original use of the equipment must commence with the taxpayer claiming the bonus depreciation on its timely filed tax return. The equipment must also be used in the United States.
*Example: *With the 100% write-off, a $10,000 investment in equipment would provide an immediate $3,500 in tax savings, assuming a 35% tax rate ($10,000 X 35% = $3,500). Without the 100% write-off and assuming the equipment is depreciated over seven years, the tax savings would be $500 a year for seven years. ($10,000 X 35% = $3,500 / 7 = $500 a year for seven years)
So what can you buy? Digium Switchvox phone systems, Adtran Routers and Switches, Polycom Video Conferencing systems, ShoreTel telephone systems, really the options are endless! Contact your local tax professional for more information on these huge tax savings! Contact Chromis Technology at 602.357.8070 to purchase Adtran, Digium, Polycom, and ShoreTel and more!