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Old 11-15-2015, 10:49 AM
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How to deduct rental of software

I am considering purchasing software that I will exclusively use for my business. The company selling the software offers a rental of the software license on a yearly basis for $3500 and a purchase of the software license for $8700. The purchase includes support for the first year with optional support for year two an beyond at $870 per year. How do I deduct each - rental and purchase and is there a tax advantage to the rental or the full purchase?

Thank you for your help.

Regards,

Dave



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Old 11-15-2015, 08:27 PM
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Quote:
Originally Posted by dpp2015 View Post
I am considering purchasing software that I will exclusively use for my business. The company selling the software offers a rental of the software license on a yearly basis for $3500 and a purchase of the software license for $8700. The purchase includes support for the first year with optional support for year two an beyond at $870 per year. How do I deduct each - rental and purchase and is there a tax advantage to the rental or the full purchase?



Dave
You basically may deduct costs for purchasing/renting biz use software related to your business /trade/ profession in the year when the software is applied for service. So,off-the-shelf software qualifies for the Section 179 Deduction. software purchased / financed must be placed into service between Jan 1, 2015 and Dec 31, 2015 to claim the costs on 2015 return; Bonus depreciation is , now in 2015, not being offered.



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