Reduce your taxes and purchase a new telephone system with the 179 deduction

Time is running out to save on your taxes using the 179 deduction for 2010. Your telephone equipment purchase must be made by 12/31/2010 to qualify. Why pay taxes when you can get new equipment instead?

Most business owners know about the 179 tax deduction but did you know leased equipment can also qualify? Both $1 and 10% buyout lease qualify for the 179 deduction. The tax savings may even be enough to make your first years payments!

Not sure about just what the 179 deduction is? Essentially, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the full purchase price from your gross income. It’s an incentive created by the U.S. Government to encourage businesses to buy equipment and invest in themselves.

 

Questions? Let us help you!

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La Nina Winter on the Way

“El Niño/La Niña-Southern Oscillation, or ENSO, is a quasi-periodic climate pattern that occurs across the tropical Pacific Oceanon average every five years, but over a period which varies from three to seven years.”-Wikipedia

By all accounts it’s going to be a tough winter. Winters like this bring with them the usual failures in infrastucture, power spikes, surges, and outages, dead phone lines, etc. Now is the time to start thinking about what you are going do if (insert disruption here)?

Things to check:

Backup batteries, usually inside a telephone system or attached UPS usually are only good for 3-5 years. After that expect short run times, no run time, or even gas leaks from sealed lead acid batteries.

Things to do:

Get remote call forwarding on your business telephone lines. This will provide business continuity in the event your facility is without power or telephone lines for an extended period of time. Keep a copy of the instructions off-site or on your person in the event your facility is inaccessible.

Get a generator so you can keep your business running at normal or reduce capacity if your facility is without power for an extended period of time. This will allow you to keep operating your telephone system, computers, servers, etc. even after all your backup batteries are used up. Don’t forget the extension cords you’ll need to hook everything up and reach a portable generator outside. never run a portable generator inside!

Have some flashlights or battery powered portable lights on hand. Even if you have windows that let daylight in you will still need them for restrooms.

A little attention to these items now will go a long way to reducing the negative impact of a service outage.

-Dale

How to lease a business telephone system.

Business Telephone Leasing 101

There are typically two types of leases: FBO (fixed buyout) and FMV (fair market value):

FBO leases are usually dollar buyout or 10% and are considered a purchase instead of a rental. The purchase may qualify for a section 179 deduction and be directly expensed, if not you usually have to expense it on a depreciation schedule. This type of lease can FMV leases are usually considered a rental lease and may provide tax advantages as all the payments and taxes can be directly expensed. This type of lease cannot have a known buyout amount. The buyout is calculated as the “fair market value” of the equipment at the end of the lease term. It is usually 15-20% of the original purchase price. Keep in mind that the leasing company probably doesn’t want you to return your old equipment so the buyout amount may be negotiable.

At the end of the lease you can return the equipment, extend the lease, upgrade the equipment and rewrite the lease, or buy out the lease. Returning the equipment is usually not your best choice either, it is usually worth more than the buyout and an upgrade can improve your system while still preserving much of the original investment.

Our leasing companies are very flexible and will also lease other things like furniture, computers, etc. with or without a communications system purchase. They can also provide custom leases with varying terms and payments so please let us know of your special requirements.

We are not accountants or tax professionals and provide this as a general terms explanation. Only your accountant can tell you what kind of lease is best for you, please consult with them.

How important are my telephones?

In today’s world there are many ways to communicate. One of the oldest is the telephone, it is a real time, interactive form of communication. Email and texting don’t really replace it. Although convenient they are very much like voice mail in that they are not immediate and don’t lend themselves well to an interactive discussion. A single telephone call can accomplish what might take dozens of emails.

-Dale