September 2008
In this issue

√ Looking to Cut
    Costs?
√ Success Story
√ Out of Memory Errors
√ Employee Spotlight
 

While most of the years economic news has been mixed to say the least, there is at least one bright spot to highlight. And acting on it before the end of this year could help you save big on your 2008 tax bill. The Economic Stimulus Package passed in February allows small businesses to deduct a higher percentage (50%) of the cost of new equipment in the first year than they have been able to before (20%). So if your company is in the market for upgrades of any kind, it will pay to make it happen by the end of this year instead of waiting until 2009.

December will be here before we know it, so wed recommend scheduling a VCIO appointment soon to discuss any projects youd like to complete by the end of the year. ITS will provide you with all the necessary quotes and project plan documentation you need to make your upgrade a complete success.

What follows are highlights of the Depreciation Bonus plan. For full details, including a calculator and brochure, visit http://www.depreciationbonus.org/

• The Economic Stimulus Act allows additional first-year depreciation of 50 percent of purchase cost
• Depreciation bonus helps businesses that buy equipment this year cut their 2008 tax bill
• Applies, among other things, to purchases of tangible personal property (including construction, mining, forestry, and agricultural equipment) with a MACRS recovery period of 20 years or less
• Equipment must be purchased and placed in service in 2008
• Equipment must be new
• Not applicable if a binding purchase contract existed prior to Jan. 1, 2008
• Allowed for both regular and alternative minimum tax purposes
• Discretionary - Taxpayer need not claim the depreciation bonus
• Depreciation bonus will expire at end of 2008

Sec. 179 Expensing Overview
The ESA also significantly increases Section 179 small business expensing levels for 2008. Under existing law, the Section 179 small business expensing limit for this year would have been $128,000 with a $510,000 phase-out threshold. For 2008, the ESA temporarily increases the expensing limit to $250,000 and the phase-out threshold to $800,000. Thus, in 2008, a small business can expense up to $250,000 as long as its qualified equipment purchases do not exceed $800,000. For each dollar that total equipment purchases exceed $800,000, the amount that can be expensed decreases by one dollar, so that a company that makes $1,050,000 in total purchases will not be able to expense anything (but could still claim the depreciation bonus).

Success Story: Communications Company Keeps Efficiencies High, Costs Low with ITS-Hosted Network and Custom Application

Background
Drakontas (www.Drakontas.com) was founded in 2004 by entrepreneurs and researchers affiliated with Drexel University to transition technologies developed at the Applied Communications and Information Networking (ACIN) Center for the Department of Defense to commercial, civilian and homeland security uses. Since its founding, the company has developed DragonForce^TM, a situation awareness tool architected for deployments on MANETs and other wireless networks for law enforcement and security personnel.

In 2007, the company leveraged its experience in the administration of research and development programs, and was awarded a cooperative agreement from the U.S. Department of Justice, Office of Justice Programs, National Institute of Justice (NIJ) to establish the NLECTC-Communications Technologies Center of Excellence (COE) for the purpose of supporting NIJs RDT&E activities within the Communications Technologies portfolio by: identifying technology requirements, supporting NIJs research and development programs; testing, evaluating and demonstrating technologies; supporting the adoption of new technology; developing technology guidelines; and providing specialized technology assistance and support to State and local criminal justice agencies on a national basis.

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