We've discussed the concept of mid year convention and how we can make the best use of it to save better in our taxes. There is another tax deduction concept which will help us get a tax benefit through straight-line depreciation over 3 year period.
Lets take a simple home based business example. We've purchased a new laptop/desktop to support our business. This has a default OS installed in it. During deduction this OS is deduced as a part of computer system (i.e) there is no separate cost deduction. Say, we're purchasing a new software (off-the-shelf software) to support our operations (say we purchase new license of SQL Server 2008 Enterprise Edition). If this is a purchase made between 2003 and December 31, 2010 it is eligible to be deducted over a period of 3 years using straight-line depreciation method. This is a deduction under Section 179.From 2011 onwards this is not applicable.
So, if you had purchased an off-the-shelf software during last year, include it as a part of the deduction during this year. It is no longer applicable from 2011 onwards. Save money to live better.
Lets take a simple home based business example. We've purchased a new laptop/desktop to support our business. This has a default OS installed in it. During deduction this OS is deduced as a part of computer system (i.e) there is no separate cost deduction. Say, we're purchasing a new software (off-the-shelf software) to support our operations (say we purchase new license of SQL Server 2008 Enterprise Edition). If this is a purchase made between 2003 and December 31, 2010 it is eligible to be deducted over a period of 3 years using straight-line depreciation method. This is a deduction under Section 179.From 2011 onwards this is not applicable.
So, if you had purchased an off-the-shelf software during last year, include it as a part of the deduction during this year. It is no longer applicable from 2011 onwards. Save money to live better.
