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Changes for Section 179 in 2011

S Section 179 of the United States Internal Revenue Code allows a taxpayer to elect to deduct the cost of certain types of property on their income taxes as an expense (rather than requiring the property to be capitalized and depreciated). This property is generally limited to tangible, depreciable, personal property which is acquired for use in the active conduct of a trade or business. Off-the-shelf computer software placed in service during the tax year is qualifying property for purposes of the section 179 deduction. This is computer software that is readily available for purchase by the general public.

The maximum annual deduction of $250,000 was extended into the 2010 tax year by the Hiring Incentives to Restore Employment (HIRE) Act of 2010. The maximum annual deduction will return to $25,000 for 2011.

Check with your Tax professional to determine if your business could benefit from Section 179 in 2010.