Tech Equipment Tax Deduction Tips (tech)
Your computers, your cell phone, Internet services, Web hosting–your business depends on technology to run, so at tax time it’s natural to want to deduct all your tech expenditures. And accountants agree–but only up to a point. If you do your own taxes, even good tax-prep software (desktop or Web-based) can’t make all the decisions for you (although it should save you from serious math errors). We talked to some accountants about key issues to consider when filling out this year’s forms, as well as when planning for next year. Deduct Now or Later? PCs, printers, and other expensive tech hardware are considered assets that retain value over several years, but the IRS gives you a choice on how to deduct their costs. You can either depreciate them, meaning that you spread the deduction over the number of years the IRS considers to be the useful life of the item (this may not agree with your opinion), or you can write the entire cost off in one fell swoop as a Section 179 deduction . How you choose to proceed depends a lot on what you expect your income and other expenses to look like going forward. Did you have a big year, and do you want to lower your profits to minimize the tax bite? Go ahead and take those full Section 179 deductions. But remember, if you write everything off immediately, you will have less to deduct next year and the year after. Section 179 Is Being Downsized Most self-employed people won’t run into it, but there is a limit on dollar totals for Section 179 deductions, and it will be plunging in the next few years–something that Los Angeles -based CPA Jim Sharvin says could definitely impact larger small businesses. For the 2009 tax year (the one we’re doing returns for now), the limit is at its high of $250,000; for 2010 it drops to $134,000, and in 2011 it plummets to $25,000. Again, that shouldn’t be too much of a problem for self-employed individuals, but if you’re running an office with a dozen or so employees, you might not want to postpone computer upgrades to next year if you’re planning on taking Section 179 deductions. Be careful, by the way, when doing state returns. Most states aren’t as generous with their equivalent of Section 179 limits, so you may not be able to write off everything you deduct on your state return. Of course, you can still depreciate the purchase over several years, but you’ll need to calculate these deductions differently. Personal Versus Business Expenses It’s tempting, especially for self-employed individuals who work at home, to write off all computer and phone expenses, but the IRS won’t look kindly on you if you do. Dan Morris, a Silicon Valley-based CPA, says that in general, the smaller the business, the more the IRS is likely to question attempts to write off 100 percent of the costs of computers, cell phones, and other hardware that most people use for personal purposes at least part of the time. For example, if you own just one phone, the IRS won’t believe that you use it only for business–most people do make and/or receive personal calls from time to time. The solution is to demonstrate that you are spending at least some money on a phone for personal use. For example, If you have a cell phone and a landline, you might be able to write off all of the cell phone and part of the landline. Similarly, if you have four computers in your home and also have a spouse and kids, the IRS is not going to believe that all of those computers are exclusively used for business. Better to designate at least one or two for family use and not try to deduct them as business assets. Deducting Tech Toys A variation of this issue arises when you seek to deduct the costs of expensive gadgets that the IRS might view as perks or toys as opposed to necessary business tools (an iPad might be an example of this). Again, Morris says, “recognize that if you’re buying cutting-edge technology, superfast tech items, the smaller the business, the closer you are to having a personal benefit–and the more likely the IRS is to challenge the expense.” Morris says to ask yourself if the item meets the IRS’s standards for a legitimate deduction, which are that it should be a usual, necessary, customary, and reasonable expense for your type of business. A computer consultant, for example, might reasonably write off more high-end computer and smartphone purchases than, say, a machinist. Morris also recommends that small businesses consider creating a technology-purchase policy document. Written guidelines are useful if the IRS is questioning whether, for example, you replace laptops every year for business reasons or as a perk. What About Software? Although you might use software for longer than a year, accountants generally prefer that you list it as an office expense (unless it’s a huge elaborate system that has been specially developed for your firm). Most off-the-shelf software, such as antivirus programs, actually are based on annual subscriptions anyway. If you have a lot of hardware expenses anyway, you might run into the Section 179 limit, so you may want to treat more items as office expenses, which are deducted completely in the year that you purchase them. This goes for small hardware items like low-end cameras –some accountants will treat anything that costs less than $500 as an expense rather than an asset. ( TurboTax , by the way, will recommend that you treat any purchase of under $100 as an expense, regardless of how long you intend to use it.) Selling a Section 179 Asset If (like me) you tend to sell tech products on sites such as eBay after a year or so in order to finance the purchase of newer models, be aware that you should report whatever you get from the sale to the IRS, which will then “recapture” that part of the Section 179 deduction. In other words, you can’t deduct the full cost of something and then get part of that money back. However, if you just let old equipment fall into disuse, you don’t have to refund any of the Section 179 deduction. Internet Access and Web Hosting The IRS doesn’t much care how you categorize business expenses, so you can list Internet access as either an office expense or a utility (like a telephone). But again, if you work at home–especially if you have a spouse or kids who go online–you can’t expect to get away with deducting the full cost of your DSL or cable service as a business expense. As for Web hosting , you can certainly deduct the cost of a business site, either as advertising or an office expense or a miscellaneous expense. You should also deduct the cost of your mobile data plan, especially if you have landline Internet access. Employee Tech Expenses If you are a salaried employee with no income that isn’t reported on a W-2, but you incur unreimbursed work-related technology expenses–for example, a laptop on which you work from home, and some portion of your Internet access–you can itemize them (on form 2106 ) as employee business expenses. But because you can deduct only such expenses that exceed 2 percent of your household’s adjusted gross income, you’re much better off getting your employer to reimburse you for those expenses. The 2 percent you have to exceed just to start writing off your first dollar is money you’ll never recoup.
Fake MacBook Air, ‘big IPhone’ Tablet on Show in China (tech)
A knock-off MacBook Air running Windows, a tablet computer shaped like a big iPhone and another tablet meant to rival Apple’s iPad were all among the devices shown off by a small Chinese gadget maker on Thursday. Teso, a gadget design outfit in the freewheeling southern Chinese city of Shenzhen , has already sold its MacBook Air look-alike for more than a year and is preparing for sales of its tablets, said a company official surnamed Wu. The tablet shaped like an iPhone uses the hit Apple phone as a model for details down to the curves on its black rear shell and the single circular button below its screen. But it uses an Intel Atom microprocessor and its screen measures 10 inches, similar to the 9.7-inch screen on Apple’s upcoming iPad . “If you’re going to copy, then copy the most expensive and the most popular,” Wu said at a trade show in Shenzhen when asked about the similarities between his company’s devices and those from Apple. China ’s notorious industry in knock-off electronics including mobile phones is largely based in Shenzhen, a manufacturing base where factories churn out gadgets for well-known companies like Apple. Counterfeit iPhones are widely sold in anarchic electronics markets in China alongside genuine versions of the iPhone and other handsets, such as phones from HTC, that are bought abroad and informally carried into China. Many other phones sold in those markets copy from Apple devices, borrowing the company’s logo or its iPod scroll-wheel rather than replicating the iPhone in full. Teso sells more than 5,000 of its imitation MacBook Air laptops each month, at a price per unit of 1,900 yuan (US$280), Wu said. That is far less than the real MacBook Air’s starting price of $1,499, as listed on Apple’s Web site, but the two machines are similar only in appearance. The Teso laptop has an Intel Atom microprocessor and runs Windows XP , the most widely pirated operating system in China. The white Teso machine does carry the Apple logo on the back of its screen, the words “MacBook Air” beneath its monitor and a wide, single mouse button like those below the keyboards on Apple laptops . “I couldn’t sell it in America,” Wu said, citing likely problems at customs. Teso showed only a mock-up of its iPhone-style tablet at the trade show, but sales should start this month or next month at a price below 3,000 yuan ($440), Wu said. Teso tweaked the tablet’s design in a bid to avoid rights infringement since its shape is based on the iPhone, said Wu. “The appearance of mine is similar to Apple’s, but theirs is a mobile phone,” he said. Teso also displayed another tablet with a 10-inch screen running Google’s Android operating system . An improved version of the tablet, which uses a chip with Arm architecture , could go on sale in around four months, and Wu wants it to run like an iPad , he said. It will sell for around 1,200 yuan ($175) and come loaded with popular applications, Wu said. But the iPad, while more expensive at a starting price of $499, is sure to give users access to many more applications through Apple’s App Store . Apple did not reply to a request for comment.
Desktop computer sales soared in February: NPD Group (tech)
SAN FRANCISCO () – Sales of desktop computers soared 30 percent in February defying talk that such machines are being made obsolete by laptops, smartphones and other mobile devices . “Desktops have been the surprise consumer technology growth category of 2010,” said NPD vice president of industry analysis Stephen Baker . Sales of personal computers running on Microsoft Window’s operating systems and of Macintosh desktop machines made by Apple both grew in the month, according to NPD. Microsoft’s release of its latest Windows 7 operating system software in October was credited with propelling sales of desktop personal computers. “We are also seeing tremendous growth numbers from the iMac after a few lackluster quarters from Apple,” the industry tracker said. “This new decade is off to a booming start.” While the number of desktop computers sold in February was 30 percent higher than the figure in the same month last year, the dollar value climbed 33 percent due to slightly higher selling prices, according to NPD.
techple’s Ban on Screen Protectors Makes (Some) Sense (tech)
Apple is reportedly removing iPhone, iPod, and MacBook screen protectors from its online and retail stores, just a couple of weeks before the iPad hits the stand. According to Macworld , the new policy also includes the removal of antiglare films, protection and cushions for laptop palm areas, and iPhone or iPod cases that include screen protection (whether this means the cases include protective film, or actually have built-in screen protection is not clear). Apple has yet to reveal the reason it is pulling protective products from its shelves. A popular speculation is that Apple wants to promote the idea that its product’s screens are sturdy enough that they don’t need to be protected (even though anyone who’s ever dropped an iPhone knows this is far from the case). That’s no explanation for why Apple is also banning antiglare, mirrored, and privacy film, unless they also hope to promote the idea that their screens are easy to read in the sun, can double as mirrors, and have magical privacy properties. Another speculation is that the products, while popular, are hard to apply and thus have a higher rate of return than other products. Of course, protective screen coverings will still be available through other channels, just not through Apple’s Website or its retail stores (though a quick jaunt down to the San Francisco Apple Store tells me that said products are still available). This may significantly increase outside sales of screen protectors, as screen protectors are currently one of the most popular “cases” for iPods and iPhones . While Apple’s ban on screen protectors is kind of strange, it makes sense. As someone who has gone through my share of touchscreen devices (starting with my Verizon LG Dare ), screen protectors are mostly just a waste of money–for both the consumer and the retailer. So perhaps Apple is just looking out for you, consumer–making sure you don’t waste your money. Er . . . yeah. Screen protectors are notoriously hard to put on perfectly , even if your job is to put screen protectors on perfectly (mine isn’t, but I once got a cell phone technician to attempt to put one on). I’ve gotten pretty close to decent (okay, I’m not a great example), only to find my hard work bubbled up in less than a week. And, yes, I have returned many a screen protector for its failure to apply decently. So Apple’s removal of screen protectors from its stores for economic reasons sort of makes sense, as they do have a high rate of return. That said, plenty of lazy people out there would rather just live with a crappy screen protector than return it (or who think such a product can’t be returned), so it’s still likely that Apple is more than breaking even. Apple products are far from “sturdy,” but the latest iPhone and iPod Touch screens are surprisingly resistant to, well, everything — from finger oil to water to barbecue sauce , and don’t scratch very easily. Even my iPhone 3G (without the “oleophobic” screen) is pretty resistant to scratches. If anything, your iPhone 3GS screen is more likely (okay, it’s very, very likely) to break if you drop it than it is to get scratched. And, well, a screen protector certainly won’t help you guard against that (doesn’t that make you feel better?). Macworld points out that it’s probably no coincidence that Apple is pulling screen protectors right before the introduction of the iPad — but why? Could Apple be thinking of debuting its very own line of (OLEOPHOBIC) screen protectors? Apple had not responded to a request for comment by the time of this post.
Internet piracy taking big toll on jobs (tech)
BRUSSELS () – Plenty of people download music from the Internet every day, but illegal downloading has a huge economic impact and could put more than one million people out of work by 2015, experts say. A study into Internet piracy by a Paris-based consultancy published on Wednesday showed that 1.2 million jobs in the European Union could be lost over the next five years if more is not done to clamp down on illegal downloading. The study by TERA Consultants for the International Chamber of Commerce focused on piracy in Europe’s music, film, television and software industries . Those industries generated 860 billion euros ($1.186 trillion) and employed 14.4 million people in 2008. But in the same year, 10 billion euros and 186,000 jobs were lost to piracy, the study found. If that trend continues — and the rapid increase in illegal downloads and advancing piracy techniques suggest it will — then up to 1.2 million jobs and 240 billion euros worth of European commerce could be wiped out by 2015. “In the near future and even today in 2010, we observe increasing bandwidth, increasing penetration rate in terms of the Internet,” said TERA Consultant’s Patrice Geoffron, explaining that piracy was only likely to escalate. “If we combine all those elements, obviously the impact in a few years won’t remain stable compared to what it was in 2008.” ARTISTS SUFFER The bulk of illegal downloading targets music, television and video sites, with consumers using “peer-to-peer” formats to download songs and video clips onto their laptops and home computers from websites without paying a fee. In that respect it has a disproportionate impact on the creative industries, with musicians, actors and artists standing to lose the most from unfettered downloading, experts say. Agnete Haaland, the president of the International Actors’ Federation, believes consumers need to be made more aware of the damaging economic and social impact of their illegal activity. “We should change the word piracy,” she told reporters at the unveiling of the report on Wednesday. “To me, piracy is something adventurous, it makes you think about Johnny Depp . We all want to be a bit like Johnny Depp. But we’re talking about a criminal act. We’re talking about making it impossible to make a living from what you do,” she said. Haaland, whose group supported the study, said one of the best ways to reverse the situation would be stricter EU legislation to enforce existing laws against piracy. ” The European Union should really lead the way and fill the important gap in the body of laws,” she said. “Consumers have to understand that there will be nothing to consume if it’s impossible to make money making the content.” Marielle Gallo, a member of the European Parliament who is pushing for tighter laws on intellectual property, said the report showed how much damage could be done to industry. But she said it would be tough to secure passage of stricter rules as several parliamentary groups are strongly opposed. (Editing by Paul Casciato)
techple Stores purging screen protection? (tech)
Among the most popular accessories for the iPhone, iPod, and MacBook lines are films and coverings designed to protect the screen from scratches; some products also fight glare and offer privacy protection. However, several vendors—who wish to remain anonymous to avoid conflict with Apple—have told Macworld that Apple will no longer sell such products, or any other products that adhere to Apple devices, in either the online Apple Store or Apple retail stores. While Apple hasn’t explained the decision to vendors, there are a couple of likely explanations behind it. Multiple sources have told us that, because of the difficulty of applying such films and coverings without blemishes or air bubbles, these products are returned at a higher rate than many other products. But it’s also possible that Apple doesn’t want to give the impression that screen protection is necessary, especially with the iPad on the way—it’s unlikely a coincidence that such a policy was put into effect just weeks before the iPad hits the street. (We have found the screens on the latest iPhone and iPod touch models to be significantly more resistant to scratches than the screens on earlier models, and screen films also negate the oleophobic properties of the newer screens.) Interestingly, this policy also includes popular anti-glare films for Apple’s recent laptops, protection and cushions for laptop palm areas, and any iPhone or iPod cases that include screen protection. The move has left some case vendors scrambling to quickly repackage their products sans screen protection, so as not to lose their privileged place in Apple’s stores. Apple had not responded to our request for comment at the time of publication. Calls to several Apple retail stores indicated that the stores currently still have such products in stock.
‘Alice’ sparks debate over quick DVD releases (tech)
LAS VEGAS – Disney’s plan to quickly release the blockbuster ” Alice in Wonderland ” on DVD is sparking new heat in a debate between Hollywood studios and movie theaters over how quickly films move from the big screen to people’s living rooms. Moviegoers will have the option of watching “Alice” at home in about three months, worrying some theater owners who fear that narrowing the gap between theatrical runs and DVD debuts will undermine ticket sales as some fans skip the cinema and wait for the DVD. “A robust, exclusive theatrical window remains vital for the health of cinemas and the movie industry as a whole,” John Fithian , president of the National Association of Theatre Owners , told members in a speech Tuesday at their annual ShoWest convention. Studios like short windows between theatrical and DVD releases because it speeds up their cash flow and allows them to pull in DVD business while films are fresh in audiences’ minds. Longer lags for DVDs also leave more time for movie pirates to sell counterfeit copies. The issue is a key topic this week at ShoWest, where studios trot out stars, films and footage to promote upcoming releases. The time window between theatrical and home-video releases gradually shrank as studios cashed in on booming DVD sales starting in the late 1990s. The average gap between big-screen and DVD releases has held steady at about four months in recent years. Now, cinema operators worry other studios might follow Disney’s lead, though the head of Sony Pictures assured theater owners that Hollywood is not aiming to squeeze them out in favor of DVD revenues. “Showing films in theaters is what makes a movie a movie. It’s what makes stars stars. It’s what makes films famous. It’s what makes the public perk up and pay attention,” said Michael Lynton , Sony chairman and chief executive officer , in the ShoWest keynote address Monday. Theater owners and studio executives say they are open to flexibility on DVD release patterns for some movies if it benefits both sides. Cinemas always beg Hollywood to release big movies in typically slow months at theaters rather than bunching up top hits during the busy seasons. “You always have the issue of lots of movies coming in the summer, lots of movies coming in the holiday period, and so our members have been talking to distributors about getting movies into late winter, like `Alice,’ trying to get movies into September. Places where we typically don’t have great movies,” Fithian told reporters Tuesday. But putting a potential blockbuster in theaters in September might mean shortening the time until the DVD release to three months or less so the film can be in stores for Christmas, which Fithian said theater owners are open to discussing. The huge business Tim Burton and Johnny Depp ’s ” Alice in Wonderland ” did over normally slow March weekends might ease theater owners’ worries. “Alice in Wonderland” shot past $200 million domestically and $400 million worldwide after just two weekends. With audiences now watching movies and other entertainment on portable devices such as laptop computers and cell phones, studios need to experiment with release patterns for new technology without undermining big-screen business, Sony chief Lynton said. “We do not want to open a new window in a way that closes yours,” Lynton told theater owners.
Intel unveils new server chips ahead of AMD (tech)
SAN FRANCISCO () – Intel Corp released its newest server chips on Tuesday, as it seeks to maintain its dominance over rival Advanced Micro Devices Inc , and prepare for an expected rise in demand. The new microprocessors, designed to power both servers and high-end desktop PCs, are the first of Intel’s server chips featuring smaller transistors that have helped the company’s laptop and desktop chips push stronger performance while eking out better energy efficiency. Intel also built in security features the company says can encode and decipher files much faster, effectively removing the “encryption tax” or computer performance lost due to protecting files. The chips will be released under the Xeon product line for servers, and Core i7 for desktop computers , which Intel hopes will gain traction particularly with the entertainment and video game markets . But the biggest opportunity rests with servers, said Intel’s general manager of server marketing, Boyd Davis, where an estimated one-third of the market is running on chips made more than four years ago. Although roughly nine out of 10 of the world’s servers contain an Intel brain according to IDC, they are not the only ones vying for those potential server sales. Patrick Patla, general manager of AMD’s server division, said the company’s newest chips will also offer increases in speed pushed by a dramatic redesign. “There will be no single bigger performance jump in the history of Opteron than the jump we are going to take from 2009 to 2010,” he said, referring to the server chip’s product name. AMD’s newest chips are due in the next few weeks. It remains to be seen how they will match up against Intel’s latest chips. (Reporting by Ian Sherr)
Windows Phone 7 Development Uses Familiar Skills (NewsFactor)
Microsoft showed off its Windows Phone 7 Series development platform Monday at the MIX10 conference in Las Vegas. Among other things, the new platform promises to give developers and designers the ability to use established technologies such as Silverlight and the XNA Framework to build new mobile apps as well as deliver compelling user experiences across a broad set of devices, according to Microsoft Vice President Scott Guthrie. “As the browser, server, web and devices evolve, a focus on delivering consistently great user experiences has become paramount,” Guthrie said. “By extending our familiar platform technologies and tools to phones, Microsoft is delivering the premier application development experience across a variety of devices and form factors .” Code by Layout During the MIX10 keynote Monday, Microsoft demoed a new design and development work-flow tool that promises to streamline the creation process dramatically. Called Expression Blend 4 Beta, the tool incorporates a visual layout mechanism that in many instances will eliminate the need for writing code. The software giant also unveiled the release candidate for its next-generation Silverlight 4 platform, which is available for immediate download, together with a comprehensive package of free tools for the Windows Phone 7 Series platform. The package includes Microsoft Visual Studio 2010 Express for Windows 7 Phone, a Windows Phone 7 Series add-in for use with Visual Studio 2010 RC1, and a Windows Phone 7 Series Emulator for application testing. “We gave these tools out to a handful of partners about three weeks ago to see what they could build,” Guthrie told MIX10 attendees. “We are amazed as some of the apps that came back.” For example, Vertigo Software CEO Scott Stanfield showed off a new media app that will enable consumers to stream Netflix movies to their Windows 7 phones. “There’s a music and video hub that I can launch here and you can see the [movie] title I just watched along with all the other content important to me,” Stanfield said. Another new app designed for Graphic.ly — a community for purchasing and discussing comic books — will enable consumers to buy digital comics and view them on a Windows 7 laptop or carry them around in their pockets on a Windows 7 phone. The app includes a hardware-accelerated deep zoom that can deliver high-resolution imagery over low bandwidth. So whenever the user elects to pan in on a comic graphic, deep zoom is able to pull down the right resolution. Targeting Device-Specific Capabilities Microsoft Vice President Joe Belfiore showed developers and designers how they can take advantage of device-specific Windows Phone capabilities, such as camera and microphone support, mapping and location, and hardware-accelerated video with digital-rights management. “Windows Phone 7 Series brings together a rich application environment, powerful hardware, a fresh approach to software, and a smart new design,” Belfiore said. “It was designed to generate incredible opportunities for developers and designers to quickly and easily deliver compelling applications and games.” For example, a new Foursquare app developed for the new platform harnesses the power of Windows Phone’s built-in mapping and location capabilities to deliver social-networking on the fly. Moreover, a new Shazam music-identification app taps into the platform’s microphone input. All of Monday’s MIX10 developments were intended to show developers and designers how they can bring creations quickly to market via a revamped Windows Phone Marketplace, which supports the discoverability of games and apps, one-time credit-card purchases, and mobile operator billing. Additionally, developers will be able to cross-promote their creations through deep linking, and handset users will be able to try marketplace apps before buying, Microsoft said.
HP extends ltechtop warranty after China starts probe (tech)
SHANGHAI () – US computer giant Hewlett-Packard on Monday issued an apology and extended the warranty for certain laptops after China launched an investigation into consumer complaints of faulty products . HP said it was “working closely” with the country’s product quality watchdog to ensure customer concerns over certain laptops were addressed. The General Administration for Quality Supervision, Inspection and Quarantine said Sunday it was investigating complaints filed by 60 laptop users that certain HP computers were defective. “HP apologises to our customers and regrets any inconvenience incurred,” Isaiah Cheung, vice president and general manager of the Personal Systems Group for HP China and Hong Kong , said in a statement. “HP is implementing an expanded customer care programme in China … for customers with certain HP Pavilion and Compaq Presario notebook PCs .” More than 500 laptop users have contacted lawyers claiming their computers were flawed, Jiang Suhua, a lawyer representing some of the consumers, told , with some requesting a recall. Most of the complaints, dating back to 2007, focus on overheated graphic chips and display screen problems. So far only 60 complaints have been successfully filed with the product quality agency, he said. HP, which last week said it had a limited warranty service enhancement programme starting November 2007, claimed the latest expanded customer care package would “address customer concerns directly”. But Jiang said his clients were “unsatisfied” at HP’s response and needed an explanation on whether the products had defects. China has detailed rules on the recall of automobiles, food, toys and medicine but has yet to establish a law governing the recall of flawed products such as consumer electronics and home appliances .
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