Thanks to a new Tax initiatives, there’s a temporary change in deductible expenses happening that benefits customers only if used in 2011.

If you’re shopping the market for shelving, buy now!  Get your plans in action because, if the shelving is a capital expense and if the shelving is installed and in use by December 31, 2011, the new law can be extremely advantageous if you’re to reduce your tax payments to the IRS. Under the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 tax law, Shelving, Inc. customers may use 100 percent of their federal tax deductible up front in 2011, instead of smaller annual deductions spread out over the life of the product.

So if one of  our customers purchases and installs $10,000 of brand new shelving in 2011, the customer will be able to deduct 100 percent of the capital expense from their taxes. If the customer waits until next year to purchase and install $10,000 of brand new shelving in 2012, that customer will be able to deduct only 50 percent of the capital expense from their taxes.

Here is a in depth example:

$10,000 shelving capital purchase. The IRS allows a 100 percent deduction in 2011. That $10,000 at the corporate tax rate of 35 percent saves the customer $3,500 paid to the IRS in 2011. $10,000 purchase price, less $3,500 saved in taxes, leaves an indirect cost of only $7,500!

$10,000 shelving capital purchase. The IRS allows only a 50 percent deduction. That 50 percent ($5,000) at the corporate tax rate of 35 percent saves the customer $1,750 in taxes paid to the IRS. The balance of the $5,000 deduction is spread out over, perhaps 20 years (the life of the asset).

If you’d like more information on this topic, please visit http://www.irs.gov/

This is a good time to begin planning your next shelving project. Contact a representative at Shelving, Inc today to help you with your next commercial project. Contact us!