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December 18, 2007
Tracking trailers
You know, trailer security is a pretty big issue in this country, although it rarely makes the headlines. That’s a direct result in the booming growth in cargo theft – a crime that, in many places, still carries little in the way of penalties while offering a hefty monetary return.
Annual losses to cargo theft are hard to pin down, though. Estimates range from $3.5 billion annually, according to the Federal Bureau of Investigation (FBI), to between $10 billion and $15 billion per year, as calculated by the International Cargo Security Council. Indirect costs related to cargo theft – not including all law enforcement or security technology costs – range from $20 billion to $60 billion each year, according to several industry estimates.
“Cargo theft is our number-one priority,” said Unit Chief Eric Ives, who heads the Major Theft Unit in the FBI’s Criminal Investigative Division in a report issues by the agency last year. According to Ives, the average freight on a trailer is valued between $12,000 and $3 million with the most common theft “hotspots” bring truck yards, hubs for commercial freight carriers, and port cities.
One way the trucking industry is looking to combat cargo theft while also getting some other efficiency benefits in the bargain is by tracking trailers. Making trailer tracking technology affordable, however, is a debate that’s raged for many years now in trucking. Now it looks like the latest chapter is going to be opened next month (January 8th to be precise) courtesy of an online “webinar” hosted by the Federal Motor Carrier Safety Administration (FMCSA) and the American Trucking Research Institute (ATRI).
The January 8th “webinar” will focus on carrier utilization of un-tethered trailer tracking systems (UTT) and their potential to improve asset management while beefing up security in trucking operations. One of the participants is Mike Gabbei, chief information officer for Celadon Trucking Services. He’s someone I’ve interviewed before on technology topics and let me tell you his insight will be particularly valuable as he has a good knack for turning “technospeak” into clear English. Another will be Al Hoffer, director of trailer operations for Landstar Systems – another carrier that’s no slouch when it comes to using technology to improve efficiency (and thus cut costs while boosting profits).
To register for the webinar, send an email to FMCSA_Host@dot.gov and include the words “UTT Webinar” in the subject line. The online conference starts at 12 noon eastern standard on Jan. 8 and should run for about one and half hours, according to ATRI. Confirmation notices will be emailed within 24 hours of registration, containing the web address, phone number, and other relevant information for participation.
Whether you are considering using such technology or not for your fleet, I think it’s well worth attending, because one day – I am most certain of this – commercial truck trailers will all be equipped with some sort of tracking device, maybe by federal mandate.
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September 10, 2007 - Fleet Management Solutions, San Luis Obispo, CA
FMS receives the prestigious honor of being ranked #232 on the 2007 INC 500 list. This award gives worldwide recognition to FMS as one of the fastest growing companies in the United States…
Fleet Management Solutions Expands to 50th Country |
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| November 6, 2007 | 12:29 PM |
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Expansion gives fleet managers greater worldwide visibility to mobile assets.
Fleet Management Solutions, Inc. (FMS), announced that it has deployed systems into Australia, making that the 50th country where the company's GPS and all-satellite asset tracking services are in operation today.
FMS is one of the few solutions in the market that allows a fleet manager to view, track and manage assets in a single system whether they are in Prudhoe Bay, Alaska, the Libyan dessert or the Australian outback. "Working with satellite partners such as Iridium and ORBCOMM has allowed FMS to reach beyond the limited capabilities of cellular or GSM based systems and serve the unique needs of fleets that operate in rugged, remote environments all over the world," stated Cliff Henley, CEO of FMS.
The company, recently named to the Inc. 500 list of fastest growing companies in America, also announced its global deployment of Google Maps. The roll-out of Google Maps, in addition to its own custom mapping, enhances the value of its already powerful FleetCentral tracking and management software and allows FMS clients to choose the optimal view depending on their regional requirements. "The addition of Google Earth mapping ensures that customers around the globe enjoy the best of mapping technology in conjunction with the tracking, safety and maintenance management features which have put FMS at the forefront of fleet tracking solutions," continued Henley.
FMS customers currently operate worldwide, including: Afghanistan, Algeria, Argentina, Australia, Belize, Bolivia, Bosnia, Brazil, Bulgaria, Cameroon, Canada, Chad, Colombia, Croatia, Ecuador, Egypt, El Salvador, Greece, Guatemala, Honduras, India, Indonesia, Iraq, Jamaica, Jordan, Kazakhstan, Libya, Malaysia, Mali, Mexico, Morocco, Mozambique, Nicaragua, Niger, Nigeria, Pakistan, Panama, Papua New Guinea, Peru, Qatar, Romania, Saudi Arabia, South Africa, Syria, Tunisia, Turkey, Ukraine, United Arab Emirates, USA and Venezuela.
"We now have a system which will instantly provide audible alarms via e-mail and text-enabled phones whenever a vehicle tries to enter a prohibited area, such as a pipeline right-of-way or well pad," stated Kevin Crozier, Manager of Survey and Navigation, PGS Onshore. "All commands, events, report and alerts are transmitted, received and available within seconds. This is an absolute requirement, as our crews work in some of the harshest conditions in the world," Crozier said.
Over the course of the past five years, FMS has become a dominant player for Government, Military, and multinational fleets in the Energy, Construction and Shipping industries by focusing on global visibility, remote coverage and rugged system design. "When a fleet manager needs reliable GPS asset tracking when it matters most, they know FMS has got them covered," says Henley. | |
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AP Newswire
GPS lowers cost, raises concerns By the Associated Press
ISLIP, N.Y. (AP) -- GPS tracking devices installed on government-issue vehicles are helping communities around the country reduce waste and abuse, in part by catching employees shopping, working out at the gym or otherwise loafing while on the clock.
The use of GPS has led to firings, stoking complaints from employees and unions that the devices are intrusive, Big Brother technology. But city officials say that monitoring employees' movements has deterred abuses, saving the taxpayers money in gasoline and lost productivity.
"We can't have public resources being used on private activities. That's Management 101," Phil Nolan, supervisor of the Long Island town of Islip.
Islip saved nearly 14,000 gallons of gas over a three-month period from the previous year after GPS devices were installed. Nolan said that shows that employees know they are being watched and are no longer using Islip's 614 official vehicles for personal business.
Some administrators around the country emphasized that the primary purpose of the GPS devices is not to catch people goofing off but to improve the maintenance and operation of the vehicles and to design more efficient bus, snowplow and trash-pickup routes. Among other things, the devices can be used to alert mechanics that a car's engine is operating inefficiently.
Still, in Indiana, six employees of the Fort Wayne-Allen County Health Department lost their jobs last year after an administrator bought three Global Positioning Satellite devices out of her own pocket and switched them in and out of 12 department vehicles to nail health inspectors running personal errands on the job
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Field service fleets see IT benefits
Jun 1, 2007 12:00 PM
According to a study conducted by Aberdeen Group, field service companies have plenty of potential to boost productivity and profits by managing their most overlooked expense: the fleet. Field service companies that implement fleet management programs and technologies save on average $1,100 per vehicle annually in operating costs alone, the report says.
Fleets operated by field service companies can save money by optimizing routes, modifying operator behavior, and managing fuel and maintenance, according to the company's recently released research paper. Companies that assign a dedicated fleet manager are twice as likely to achieve vehicle utilization rates greater than 90% compared to those that spread the responsibility among different departments.
Companies that have implemented fleet management technologies to capture driver and fleet data in real time report a 9.6% lower operating costs per mile than those without that capability.
Among the reports conclusions, Aberdeen recommends field service companies leverage technologies that optimize the efficiencies of fleet expenses as well as labor and inventory. Of particular interest to management solutions providers, the field service companies that don't leverage technology cite lack of knowledge on service providers and inability to justify ROI on fleet management solutions as their top reasons, according to the report.
Aberdeen said 29% of the companies surveyed are looking to deploy a fleet management solution within 12 to 18 months — mainly to control fuel and maintenance expenses
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BREAKING NEWS
Networkcar Selects Motorola ‘s In-vehicle GPRS Communication Module
Network Car is expanding its MRM product, Networkfleet, to support GSM carriers, who offer the GPRS wireless data service. The Reynolds and Reynolds subsidiary has chosen Motorola’s G20 wireless in-vehicle communications module. Networkfleet includes fleet management and remote diagnostics.
Fleet Management Systems Inc.is very proud to be a nationwide reseller for all Networkfleet products.
CEO Guide to Technology
By Rachael King
Tracking Trucks the Telematics Way
Fleet operators are using a combination of wireless, computing, and GPS systems to cut costs and keep better tabs on drivers
Times are tough in trucking. Operating margins are low, driver turnover is high, and fuel costs are through the roof. Consider the expenses associated with truck idling alone. As long-haul drivers rest in their cabs or operate onboard appliances such as microwave ovens and TVs, often they leave the engine running. According to a 2002 study by the Environmental Protection Agency, long-duration truck idling consumes about 960 million gallons of diesel fuel annually.
No wonder it's drivers, rather than fleet operators, who control some 80% of the variable costs associated with trucking. In an effort to rein in expenses, a growing number of trucking companies is investing in so-called telematics, a combination of computing, wireless data, and global positioning system (GPS) technology. The U.S. market for commercial vehicle telematics was $942 million in 2005, and is expected to rise to $2.13 billion by the end of 2010, growing annually at almost 20%, according to consulting firm Global Industry Analysts. The idea behind telematics is to help fleet operators run their businesses more efficiently.
Ryder System Inc. (R), which leases truck fleets to business customers, began testing telematics in the Great Plains this year. The company outfitted 5,000 trucks with special equipment that could track vehicle movement in real time, decrease truck and cargo theft, and help prevent breakdowns and emergencies. "Customers can see where their vehicles are, if a driver is speeding, idling too much, or sitting somewhere he's not supposed to be," says Ryder CIO Kevin Bott.
SAVING TIME AND FUEL. For the trial, Ryder partnered with Cingular Wireless, owned by AT&T (T) and BellSouth (BLS), and Teletrac, which makes GPS tracking systems for fleet management. The resulting product, called RydeSmart, is a compact hardware and software unit that is installed in a truck and connected to the vehicle's existing computer and diagnostics systems. The unit continuously monitors the truck's location, mileage, and speed, as well as other performance and diagnostic data, which businesses can access through a Web portal. Ryder says the system saves customers on average one hour per driver each day and that it reduces fuel costs by about 10% to 15%. After the initial trial, Ryder expects to expand the product to customers across North America in multiple phases in 2007.
In the U.S., there are more than 20 million fleet vehicles, including service and delivery fleets, according to C.J. Driscoll & Associates, a consulting firm that specializes in GPS and wireless technologies. Of those, an estimated 1.5 million to 2 million have GPS tracking systems installed. Qualcomm (QCOM) is the leading provider of commercial vehicle telematics in long-haul trucking, while @Road is the largest supplier of mobile resource management software to local fleets, Driscoll says.
Very often, the motivation for getting a GPS tracking system is driver productivity, but it also can enhance efficiency in other ways, such as by giving dispatchers better information on driver location and helping them better assign routes, says Driscoll President Clem Driscoll. Other incentives for GPS tracking include improved security and customer service.
PAYLOAD SECURITY. Last year, Dow Chemical (DOW) decided to integrate radio frequency identification (RFID) and GPS tracking technology on trucks and rail cars. "If we look at hazardous-material shipments, one of the things we want to do is to get into closer proximity of where that shipment is," says Dave Kepler, chief information officer of Dow Chemical. The company is working on a trial right now of RFID "smart boxes" that contain sensors for light, humidity, temperature, and shock. Those sensors could help Dow identify whether shipments were tampered with or dropped. With truck shipments, Dow is looking at RFID and GPS not only for security, but to help monitor the performance of the drivers as well.
Truck tracking isn't without its critics, particularly among drivers and union representatives who consider it invasive. But proponents say everyone benefits, including drivers, when operators rely on cutting-edge technology.
One area is compliance with state and federal reporting requirements. Interstate drivers have to follow strict rules for so-called fuel tax reconciliation. These require them to keep tabs on where they purchased fuel, how much they spent, and how many miles they drove in each state. "It's a huge paperwork nightmare," says Ryder's Bott.
Truckers also need to record the number of hours they work to comply with federal regulations. With RydeSmart, reporting for both of those tasks can be automated. Bott expects that this feature will not only help Ryder's customers, but it will also help Ryder with its own billing. "Trip records reporting will be beneficial from everybody's standpoint."
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| Tracking Orkin's Bottom Line
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With a fleet of 5,500 trucks logging 150 million miles each year, Orkin Inc. was certain that better fleet management could significantly impact its bottom line. So in 1999, the company began experimenting with GPS tracking in three of its branches. Since that time, Orkin parent company Rollins, Inc. has spent $4 million on GPS hardware and software. That investment has already begun to pay dividends, and with a GPS-based fleet management program now being rolled out across the entire company, Orkin stands to reap even more rewards.
Largely as a result of the GPS monitoring and Orkin's driver certification programs, workers compensation claims (a majority of which are related to driving) have dropped 32 percent since 2001, resulting in an annual savings of more than $1 million. Physical damage claims to vehicles dropped 21 percent during the same period, saving another $500,000. In addition, auto liability claims plunged 35 percent, for a savings of more than $2 million. Mike Gibney, Orkin's director of claims and loss control, notes the company's accident frequency ratio has been slashed from 13.3 accidents per million miles driven in 1997 to about 7.7 accidents per million in 2003.
"We've also gone from 12,000 casualty [insurance] claims in 1997 to right at 5,000 claims at the end of 2003," adds Gibney. "It's been a phenomenal decrease."
In addition to enhancing its bottom line, fleet tracking is helping the company in other ways.
Preventing Accidents. Orkin wanted to prevent service vehicle-related accidents that could injure employees or others. Identification of poor driving habits before a ticket, accident, or fatality occurs can save employees not just their jobs, but possibly their lives. The speed watcher function within the GPS tracking system is encouraging drivers to slow down (see "Take it Easy, Lead Foot!" sidebar).
Assuring Quality. Fleet tracking provides management with evidence that technicians are performing their jobs responsibly. Not only can management see that Orkin employees are driving properly and responsibly, they can also verify that technicians spent adequate time on a customer's service and ensure that services aren't altogether skipped. In the past, if a customer claimed he or she was not serviced, it was that person's word against the technician's. With GPS, the amount of time a technician spends at any location cannot be disputed (see "Tracking Data Makes the Case" sidebar).
Improving Maintenance. Beyond driver skills, the new tracking system uses its GPS odometer feature to alert managers when 3,000 miles have passed between oil changes or 10,000 miles since transmission checks and so forth. Such functionality should help Orkin get more miles from its vehicle fleet.
With these goals and accomplishments in mind, Orkin has just completed the first of three phases of its companywide rollout. Though a complex infrastructure supports Orkin's fleet-tracking capabilities, for the drivers, it's as easy as turning the key.
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Maintenance edge in truck-tracking solution
by Terrence Nguyen, web editor
Jun 29, 2006 4:00 PM
Networkcar, a Reynolds and Reynolds company, has won a Stevie Award for “Most innovative Company” in recognition of its Networkfleet wireless vehicle management system for commercial fleets. Networkfleet draws locations-based and mechanical information on a fleet and compiles efficiency and operation reports in near real-time via the web.
Its in-vehicle device collects and wirelessly transmits data directly from a vehicle’s engine computer and a global positioning system (GPS). The system tracks vehicle location, fuel consumption, mileage, speed and idle-time 24/7 through a web application.
In an interview with FleetOwner, Networkcar president Paul Washicko said that Networkfleet won the award because it provides customers with a unique combination of location and vehicle maintenance data.
“We combined both location data and remote diagnostics in one package,” Washicko said. “We have a number of patents around the remote diagnostics. I think we’re changing the industry with the remote diagnostic angle.”
Washicko said the diagnostics capabilities are what give Networkfleet an edge over competing systems. Networkfleet taps directly into the vehicle on-board computer (OBC), enabling the system to send out alerts if the equipment is functioning outside the set parameters. It could automatically send out an email if a vehicle detects a diagnostic trouble code to allow technicians to address problems as they start.
The system even tracks emissions-related issues. For example, in California the system is approved to perform emission checks remotely, Washicko said.
In spite of its potential for helping fleets run more efficiency, Washicko said that trucking companies are still tackling a learning curve on how to integrate this feature into its operations.
“We do have customers who use it solely for remote diagnostics,” he explained, noting some
large corporate customers that purchased the system through its maintenance department. “But the majority of our customers haven’t been exposed to the remote diagnostic benefits. We’re changing what customers are looking for.”
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Recording on the Go. Once the technician inserts the touch key and commences his or her appointed rounds, the onboard processing unit begins acquiring GPS positions once per second. Based on change in the heading, speed, or position, the onboard unit determines whether or not to log the vehicle's position. For example, if the vehicle is traveling at a constant speed in a straight line, the system may only log the position every 16 seconds. When the vehicle begins to turn, however, and is changing heading or speed, the unit records positions every second. If the measured speed drops below 20 miles per hour but the vehicle is still moving, the unit starts to measure and record what is called "traffic idle time." After the vehicle is stationary for 60 seconds, it measures what is called "stop idle time." The patent-pending algorithm that enables this functionality is designed to maximize the use of onboard memory and storage space.
Throughout the day, the onboard processor logs positions and headings as dictated by the algorithm and sends data to the touch key by way of the housing interface. At the end of the day, the technician returns to the branch office. To download trip data, he or she then inserts the key into a USB driver connected to a PC in the branch office.
Client-Server Configuration When the driver inserts his or her key, the vehicle trip data are automatically downloaded to the branch office computer, or client. The encrypted data are then sent across Orkin's wide-area network by way of 64K lines to a database server in the company's Atlanta headquarters. On the SQL server, the trip data are then placed in the database and an "exception processor" searches for operational violations based on a previously defined set of rules. Violations are flagged in the database and reported back to the branch manager. The entire download and processing procedure takes about two minutes. The client and the server side each play an important role in the overall process.
Client Side. Though rules about speeding and other driver behavior are standard across the company, geographic rules are generally created on the client side. Branch managers or other qualified users employ a proprietary mapping software and map database -- along with the fleet-tracking program's functionality -- to define zones or geographic regions relevant to their local business, and build rules relating to those zones.
For instance, managers can set up geofences to create area zones in which vehicles are not allowed or in which they may only operate within very specific parameters. To accomplish this, the user mouse clicks around the perimeter of the desired zone until the borders are closed. Rather than simple round or square buffer zones, users can draw freehand polygons over irregularly shaped areas to precisely match sales territories, properties, or areas within a property (see Figure 1). Users can create exception rules to these zones. The most common rules are excess stop time in a zone, use of vehicle in or out of assigned zone, excess speed inside zones, excess engine idling inside zones, and use of auxiliary equipment inside zones (see Figure 2).
In addition, program managers can create customer zones by importing customer list data from a spreadsheet formatted with name and street address, or by using geo-coded customer data based on name and latitude/longitude. If street addresses are used, the fleet-tracking software interfaces with the mapping software to locate the addresses, and then draws them on a map of customer zones.
Customer zone creation enables managers to verify customer visits and provide proof of technician activity (time spent at a customer address), if necessary. When a customer point on the map is double clicked, further information appears in an attribute box. Such data can include the date, time, driver, vehicle, speed, stop time, trip distance, and readings from auxiliary sensors. If this point is at a customer location, the customer name is also listed.
In addition to creating rules and tracking driver activity, this client-side functionality enables branch managers to oversee sales territories and marketing efforts for their region.
Server Side. On the server, each technician's track is compared against these rules -- as well as standard companywide rule sets -- to look for deviations. When the server identifies violations, it notifies branch managers. But because the system provides password-protected access for branch, region, division, and national management personnel, all levels of management can also generate reports, in spreadsheet or html format, about vehicles and drivers (see Figures 3 and 4).
A Swarm of Benefits With the fleet-tracking system already installed in 1,000 vehicles in 80 regional offices, Orkin's benefits are quickly multiplying. And even as the company continues with the second and third phases, which involve installing the system in 300 more branch offices during the next two years, it is already embarking on a new project to employ the fleet-tracking system's routing functionality to save even more money.
"There aren't a whole lot of companies who have cut worker and customer claims frequency by 60 percent and cut their claims dollars in excess of 40 percent," says Gibney. "The economics behind the system make us a more vibrant and healthy company."
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Small businesses benefit from Section 179 deduction
Bankrate.com
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Typically, if property for business has a useful life of more than one year, the cost must be spread across several tax years as depreciation with a portion of the cost deducted each year.
But there is a way to immediately receive these income tax benefits in one tax year. The provisions of Internal Revenue Code Section 179 allow a sole proprietor, partnership or corporation to fully expense tangible property in the year it is purchased.
And tax-law changes have made this option much more appealing by dramatically increasing the amount that can be written off immediately. The inflation-adjusted amount for 2007 taxes is $125,000.
Eligible property
Property that may be written off in the tax year of purchase, rather than depreciated over the asset's useful life, includes:
- Machinery and equipment
- Furniture and fixtures
- Most storage facilities
- Single-purpose agricultural or horticultural structures
Also, the definition of eligible section 179 property was expanded by the 2003 legislative changes to include off-the-shelf computer software. Previously, it had to be written off over three years.
The IRS says ineligible property includes:
- Buildings and their structural components
- Income-producing property (investment or rental property)
- Property held by an estate or trust
- Property acquired by gift or inheritance
- Property used in a passive activity
- Property purchased from related parties
- Property used outside of the United States
How, when to use deduction
The Section 179 election is made on an item-by-item basis for eligible property. You don't have to use it on all eligible property bought in that year. The election must be made in the tax year the property is first placed in service.
The Section 179 deduction isn't automatic. Taxpayers who want to take the deduction must elect to do so. You make the election by taking your deduction on Form 4562. When you file this form, attach it to either of the following:
- Your original tax return filed for the tax year the property was placed in service, regardless of whether you file it timely.
- An amended return filed by the due date, including extensions, for your return for the tax year the property was placed in service.
Make sure you make the election when you file your original income tax return for that year. You can't later amend your return to elect Section 179. The only exception to this is if you amend your return before the actual due date, including extensions, of your original return.
For example, the maximum extended due date to file your return is Oct. 15. You file your return on Sept. 1 and then realize you didn't utilize the Section 179 deduction. You still have until the Oct. 15 deadline to file an amended tax return to claim the deduction.
Maximum Section 179 deduction increased
Congress periodically reviews the amount a taxpayer can claim as the annual Section 179 amount. As part of an economic stimulus and tax-reduction package signed into law in May 2003, the expense limit was hiked from $25,000 to $100,000.
An inflation adjustment for 2004 added another $2,000 to the limit. The bigger deduction also will be available again for the 2005 tax year, again with a possible adjustment for inflation. Lawmakers upped the immediate deduction amount in the hopes it would encourage businesses to invest in new equipment sooner.
However, when it comes to vehicles purchased utilizing the Section 179 break, legislators took back some of the benefit as it related to large sport utility vehicles. When the limit was originally increased, business owners were allowed to select for company use one of several light-truck models (which included many luxury SUVs) weighing more than 6,000 pounds fully loaded and write off most, if not all, of the costs on their tax returns. That changed on Oct. 22, when the American Jobs Creation Act became law; now only company vehicles weighing 14,000 or more are eligible for the larger deduction amount.
Any amount of property over the maximum deduction must be depreciated.
Limitation on annual amount of property purchased
There also is a limit on the annual total of deductible property. If the cost of qualifying Section 179 property you put into service in a single tax year (2003 through 2005) now exceeds $400,000 then you can't take the full deduction.
For every dollar above $400,000 that a business owner spends on eligible property, he loses a dollar in deductions. For example, the manufacturer completely re-equipped his facility at a cost of $407,000. This is $7,000 more than allowed, so he must reduce his eligible deductible limit to $93,000: $100,000 minus $7,000.
The limitation amount will be indexed in 2004 and 2005 to reflect the inflation rate.
Deduction limited to taxable income
You have now determined the maximum deduction based on the amount of property purchased during the year. You now must pass the aggregate income hurdle.
Your deduction is limited to your aggregate taxable income from the active conduct of any trade or business. Active trade or business includes employee and spouse's wages, sole proprietorships, partnerships and S corporations. Basically, this means that unless you have other sources of business income, your Section 179 deduction can't create a taxable loss for your business.
More business owners are able to take advantage of the deduction when they combine their company earnings with those of a spouse or money earned in addition to (or before starting) their own company income.
For example, you are someone else's employee for most of the year. Your wages exceed the Section 179 deduction. You start your own business at the end of the year and purchase equipment and furniture. Even if your new business doesn't generate gross income that year, you can still take the Section 179 deduction on the new equipment and furniture. Why? Your wages exceed the Section 179 deduction.
This aspect of inclusion also applies to a spouse. For example, you earn annual wages of $60,000 as an employee. Your spouse doesn't work during the year but begins a new business at the end of the year. Your spouse purchases and places in service $15,000 of Section 179 property at the end of the year. Your spouse's business doesn't generate gross income at the end of the year. Even though your spouse hasn't earned trade or business income for the year, the Section 179 deduction of $15,000 is still allowed in full since your wages count as trade or business income.
Any amounts disallowed by the trade or business taxable income limit are carried over to the next year and added to the cost of any eligible property placed in service in that year. The same rules for maximum deduction, maximum annual investment and taxable income apply to the next tax year as well. .
Conclusion
The tax tip explains the process for using Section 179 to fully expense certain business expenses immediately instead of depreciating them across a period of several years. You should also be aware of less obvious advantages of the Section 179 deduction:
- Lowers adjusted gross income, which could help you qualify for various deductions which are limited by AGI.
- Lowers earned income, which can increase your earned income credit.
- Is allowed in full even if the eligible property is placed in service on the last day of the year.
This tip also includes examples that demonstrate the three limits: the maximum dollar limit, the investment limit, and the taxable income limit. By including employment and spousal wages, many taxpayers find they are able to take advantage of this provision.
Are you interested in more information? Refer to Chapter Two of IRS Publication 946: How To Depreciate Property. |
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