What you might call a fringe group – global conspiracy prophets are fringe, right? – have uploaded an obscure video from 1994, where then former Secretary of Defense Dick Cheney defended the decision not to invade Iraq following the Gulf War (a decision which, if you remember in fairness, broke poor Al Gore’s heart).

Though it may be easy to dismiss a group called "Grand Theft Country," whose primary goal it is to prevent future state-sponsored terrorist attacks (9/11 being the first one) while exposing media cover-ups and global-fascist alliances, this is the very group that has unmasked Vice President Cheney as a man who abandoned previous (and prophetic) insights.

In the video, produced by the conservative American Enterprise Institute, Cheney predicts invading Iraq and toppling Saddam Hussein would be "a quagmire" the US wouldn’t be interested in navigating.

Cheney focused on the consequences of taking over Iraq, and the delicate balance of power there that would be obliterated by religio-political factions as they divvied up the ruins.

And then there’s this little nugget at the end, regarding George H.W. Bush’s decision not to invade:

And the question for the president, in terms of whether or not we went on to Baghdad, took additional casualties in an effort to get Saddam Hussein, was how many additional dead Americans is Saddam worth?

Our judgment was, not very many, and I think we got it right.

So, apparently, there was a change of heart, one that wasn’t (hasn’t been) sufficiently addressed in the past six years in the media – a good time to bring that up might have been, say, the 2004 election.

I’m not going to walk out on that limb with Grand Theft Country and point to a global-fascist conspiracy with Arab-terrorist pawns and complete media control, but I will concede they’ve made a point nicely, and that point will be tested if and when the rest of the media, which will report on YouTube videos of every other (read: unimportant) stripe, picks up this gem.

It also underscores the power and importance of YouTube, sites like it, and citizen journalism, while reminding us why  the First Amendment to the US Constitution included the Press in its protection, and why consolidated media might not be the best idea we’ve had in the past 200 years.    

Hat tip to Editor and Publisher.

What am I talking about? It’s called the Section 179 deduction, and if there’s one tax break you need to understand, this is it. Here’s why:

The Section 179 deduction enables the Small Business Owner to “expense” (i.e. deduct in the current year) up to $102,000 of the cost of most business equipment, rather than use those stingy and complicated depreciation rules that require you to write-off the cost over five or more years.

What’s so great about that?

Think about it like this: I’ve got a dollar and I’d like to give it to you. You have two choices — I give it to you now, or I give it to you 5 years from now.

Which do you prefer?

Obviously, you’d rather have it now, right?

And why is that?

Because of what you learned way back in Finance 101: something your banker calls “the time value of money.”

I’ll spare you a boring textbook definition. Instead, let’s just assume we agree on this simple point: Is a dollar worth more today or 5 years from today?

It’s worth more today.

And that’s why the Section 179 deduction is so valuable.

Huh?

Let’s use an example to bring all this financial theory into reality.

You buy $5,000 worth of office equipment in 2004. Under normal depreciation rules, you wouldn’t get to take a deduction for $5,000 in 2004. Instead, you’d write off the $5,000 over 6 years — part in 2004, part in 2005, etc.

If you’re in the 35% tax bracket, you get your $1,750 in tax savings over 6 years. Yawn. That’s a long time!

You’d get your deduction, and the resulting tax savings, but you’d have to wait 6 years to realize all the benefits.

Section 179 says that if you meet certain requirements, you can deduct the full $5,000 in 2004. You reduce your taxes by $1,750 in Year 2004.

So let me repeat my rhetorical question: Uncle Sam has $1,750 he’d like to give you. When do you want it? All at once, or spread out over 6 years?

That’s the beauty of Section 179.

But you have to meet certain requirements to benefit from Section 179. One requirement concerns the total amount of equipment you can deduct rather than depreciate. In 2002, the amount was $24,000. And for 2003, the amount was originally set at $25,000.

Then Congress and the President passed a new tax bill in late May 2003 that raised that amount to a whopping $100,000. And since that $100,000 gets adjusted for inflation, in 2004 the maximum Section 179 deduction is now $102,000.

Never liked depreciation? Well, you can pretty much kiss it good-bye now. If your business buys more than $102,000 of equipment in a single year, it ain’t so “small” any more! So this new law should cover all small businesses. Enjoy!

One final note: A few other requirements must be met to claim the Section 179 deduction. Here’s a brief, but not comprehensive, overview:

1. Most personal property used in a trade or business can be deducted via Section 179. Real property cannot. Typical examples of personal property include: office equipment such as computers, monitors, printers and scanners; office furniture; machinery and tools. Real property means buildings and their improvements.

2. The $100,000 amount (adjusted for inflation) can be used through 2007. In 2008, unless new legislation is passed, the amount goes back down to $25,000.

3. There are special rules regarding the application of Section 179 to the purchase of business vehicles. (Where there are tax breaks, there are always expections!) For example, the special “SUV rule” that allowed 6,000 LB vehicles to be fully deducted (up to the $100,000 amount) was recently changed to $25,000, effective October 22, 2004.

4. Your total Section 179 deduction is limited to the business’ annual profit. In other words, you cannot use the Section 179 to create or increase a loss.

This is known as the “taxable income limitation.” For “C” Corporations, this limitation is very cut and dried. But if your business is an “S” Corporation, Partnership, LLC, or Sole Proprietorship, it may not be as limiting as it seems. For these non-”C” Corp businesses, the Section 179 deduction can be used to offset both business and non-business income.

And if you’re married filing jointly, the Section 179 deduction can offset your spouse’s income, including W-2 income.

Example: You start a new business in 2004 that ends up with a loss for the year of $5,000 (before taking the Section 179 deduction). Your spouse has W-2 income of $60,000. Even though your business is unprofitable, you can still take the full Section 179 deduction of $5,000 (again, assuming your business is an entity other than a “C” Corporation).

Be sure to consult with your tax professional to get the scoop on all the Section 179 rules.

Wayne M. Davies is author of 3 tax-slashing
eBooks for small business owners and the self-employed. For a
free copy of Wayne’s 25-page report, “How To Instantly Double
Your Deductions” visit http://www.YouSaveOnTaxes.com