Dispatch from the Head Sherpa – December 2011 Pathfinder

News from the Manufacturing Front

As the year comes to a close, we wanted to remind you that there is still time to take advantage of Section 179 Deduction – the “Cinderella Tax Law” -- by purchasing your business equipment and putting it into use before December 31st, 2011.

If you haven’t heard of Section 179 , now is the time to call your financial advisor and get caught up. Here’s the quick version –  the Section 179 Deduction allows you to deduct the full purchase price of qualifying equipment and software purchased during the tax year. This means that if a qualifying piece of equipment (more on that later) is bought or leased, the full purchase price is deductible from your gross income. This is meant to help businesses reinvest in themselves by providing maximum tax incentives for purchasing.

The best part is that most computers and software are considered qualifying equipment – so now really is the time to reinvest in your business. We encourage you to check out this website,Section179.org, which has a lot of great information regarding the tax law and how to make the most of the deduction for your business. And when in doubt, always refer to your accountant or to the IRS.

By now, also, I’m sure you have heard of the terrible flooding in Thailand. What you may not know is Thailand accounts for up to 45% of the world’s hard drive production – and the manufacturing facilities there have taken serious damage during the flooding. Industry forecasters are predicting that hard drives (which have risen in price dramatically in the last several weeks) will have shortages lasting well into next year.

In the trickle-down effect, this means that as hard drives become scarcer and more expensive, those costs will be passed down the line to you, the consumer. This will result in longer production times for computers and overall price increases, possibly up to 30% higher than prices from the previous year’s quarter.

So if you were considering purchasing new equipment, but maybe were thinking to hold off – we highly recommend that you do so now – it will be a win-win. You’ll save money, have new equipment, and be able to take advantage of federal tax incentives.

We’re here to help – if you need more information on how we can assist with your purchasing, or have any other questions about how we help our clients – feel free to reach out to us anytime or call 302-781-3005.



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