We are a Mac household. And a Mac family. Before you judge, rest assured that it wasn’t that cute Justin Long that influenced our decision. We were all-Mac before it was cool. My husband was a Drexel grad back in the 1980s when Drexel standardized the Apple and has been addicted obsessed hooked a fan ever since.
Apple has, especially as of late, tried to position itself as a high-end tech company, one that perhaps puts the end product over the cost. In fact, one of the criticisms of Apple has tended to be that it is more expensive than other PC products and that it lures consumers without any regard to affordability. So far, it seems to be working as sales of iPods, iPhones, MacBook Airs and iPads have soared despite the state of the economy.
But I have to wonder if that’s changing…
Apple sent out an email today that is a little different from its prior pitches (so far as I can remember). The email, with the subject line “Give your business a year-end gift” urges you to buy a new computer by the year-end for your business with the incentive that “you may be able to deduct them from your 2010 business income.” And it’s mentioned not once, but twice.
Here’s what it says at the end: Better yet, it may be deductible from your 2010 taxes when you buy before December 31.*
Wait? Is Apple giving tax advice? Of course not. Their legal is on it, with a disclaimer tucked away at the bottom of the email:
*Up to $500,000. Certain conditions and restrictions apply. Consult with your tax professional regarding eligibility.
But they’re clearly trying to get you thinking about taxes – and the possibility that you could possibly get a pretty nice tax benefit from buying their computers by year-end.
So is it true? And if so, what’s this all about? Well, clearly Apple is targeting small to mid-sized businesses with their advertising. And it seems to have dawned on them that to be competitive, it’s not enough to just be pretty (sorry Audrina Patridge). You have to be able to offer something else. In this case, you want to be able to justify a brand new shiny MacBook Air (starting at $1200) with the notion that you might be able to deduct the cost on your taxes. They’re banking on the recent jobs bill (pun not intended) to help push them ahead.
In September of this year, Congress pushed through H.R. 5297, also known as the Small Business Jobs and Credit Act of 2010 (you can download the entire act and read more about it at my prior post). In addition to some other goodies in the bill, it increased the limits on section 179 deductions fairly significantly – almost doubling them across the board. Section 179 is the section of the Tax Code that allows you, so long as you otherwise qualify, to treat the cost of certain property as an expense and deduct it in the year you start using it instead of depreciating it over several years. This is a huge benefit for small businesses who would otherwise, be out of pocket for the expenses, but would not be able to take the full expense as a tax deduction in the year of purchase (or use, depending on the circumstances). As a result of the Act, that limit has been increased to $500,000 for tax years beginning in 2010 and 2011 (in comparison, without the Act, the limit would have been $250,000 for 2010 and $25,000 for 2011).
There are some exceptions and limitations but for the most part, this is a terrific provision for small businesses. It is, as you can imagine, supposed to serve as an incentive for businesses to invest in their businesses immediately rather than waiting a few years. The theory is that, if it works, businesses will patronize other businesses. Increased spending means increased revenue which would then mean increased spending… If all goes as planned, it should give the economy a boost.
That’s exactly what Apple is counting on. I have to say, as marketing goes, it’s pretty darn clever. And despite whether you love Apple or not, you have to give them credit for consistently being above the curve on the marketing side. As a tax geek, I’m a little bit in love. Using the Tax Code as a marketing tactic is genius (so, hey Apple, call me). What do you think?
I enjoy your postings, especially your invention of the crossed out word as a literary device. However, while your postings are generally well-written (actually because they are, or, otherwise, I wouldn’t bother writing to you), please be more conscientious in your proofreading (and grammar, but I don’t profess to be an expert, so I won’t point out examples in this article.) Regarding proofreading, for example, I did a double-take when I saw your version, above, of a quote from an Apple ad: “you maybe able to….” That should be “may be”. Sure enough, you then showed a screenshot of the ad with the correct spelling and then correctly spelled it later. It’s one thing to waste our time puzzling through flaky spelling and grammar, but it’s worse to misquote.
Horrors! A “flaky” error? Well, then I clearly should be flogged.
I don’t profess to be perfect and occasionally I make a mistake. It happens. I don’t lose sleep over it. I just fix it and move on.
As to the mistake you pointed out, yes, it was a mistake but it didn’t happen the way that you think it did. I’m pretty good about using quotes exactly as they appear (it’s the other weirdness in my head that I have an issue with). What happened in this case was that the quote was from an Apple ad. I use an offline editor (Mars Edit). The phrase was actually on two lines – not from the screenshot in the piece but just above it. I cut and pasted directly from the ad. The phrase “you may be able” was split after the word “may.” My offline editor didn’t see a line break after the “may” and just ran the words together. I didn’t catch it because it was a direct quote.
Wrong? Sure. Purposeful? No.
So I regret the error but as per the Beatles, ob-la-di, ob-la-da, life goes on.
@ Will Turner: Wow…
I’ll be frank with you… I’m a PC guy (and that doesn’t stand for “politically correct”), but for the reasons I use a computer (like 99% of other users out there, for web browsing and an office suite) there is no justifiable functionality based cost benefit analysis that makes a Mac as good a value as a cheap generic PC.
That aside, it just seems to me like this 179 provision, like everything else out of Washington, has a silver lining. There is no doubt that having the ability to expense most of your business purchases as 179s is a great deal for small business owners up front, but what happens next year when tax rates have gone up and you don’t have a depreciation expense to help bring down your income? Seems like the 179 expensing is symptomatic of the US mentality as a whole, the proverbial,”I want it now!” If you are recommending to your clients to accelerate income into 2010 before the big sunset, might you want to also make sure that they are spreading their depreciation down the road for a tough day?