Revenue Canada wants me to buy an iMac 27″

For as long as I’ve been a developer, there was only ever once when I had a machine that I felt was an adequate development workstation. That was around 2001 when I had a dual-proc 667MHz P3 768MB RAM and three 17″ CRT monitors. This baby put out enough heat that my home-office didn’t need a heater on during the rainy Seattle winters; in fact, it was so warm in there that I’d wear shorts, a tee-shirt, and left the window wide open.

Since that time though, my computer has typically been limited to a laptop, my biggest since that dual-proc furnace being a 17″ Powerbook G4. Being a developer, there are three priorities that stand out above all others: screen real-estate, memory and CPU speed. Due to my history of being a web developer, only the first item on that list was a big priority. Since becoming an iOS developer, where your productivity is directly related to how fast you can compile your app, and how fast your performance profiling tools can run, I’ve encountered the other barriers developers face.

In the past though, I’ve largely been a cheap developer, opting to get by with what I have, or doing whatever I can to improve my productivity in other areas. However, for the first time since that space-heater with a RAID array, I have an opportunity to get the workstation I’ve been dreaming of.

Since I run my own personal business on the side, I can take advantage of tax deductions that normally wouldn’t be available to me. Computer purchases, like other capital expenditures, can be tax deductible, so the money I would have to pay the Government in the form of taxes, can be deducted from what I owe them. Normally only a certain percentage of that purchase price can be written off per year, in a process called amortization, so it’s effects are only moderately felt.

In Canada, as part of their economic stimulus package they put together to boost small business spending, they instituted a limited-time Capital Cost Allowance for 100% tax deductions on computer hardware and software purchases made between January 27th 2009 and February 1st 2011.

Think of it this way: assume I had a decent year of app sales on the iTunes App Store, and because of my extra income, let’s say I owe the Government $10,000 in taxes. Normally my only recourse is to dig up $10k (which, since I’m a good little business owner, has been sitting in a savings account all year long) and hand it over to Revenue Canada.

But because of this stimulus package, I have an option. I can instead buy $4,000 worth of computer hardware necessary to effectively run my business, and then only give $6,000 to the Government. No need to spread that deduction out over several years, no need to have the accounting hassle of carrying that equipment value over year after year. I see, I buy, I save.

There are limitations of course. Just as with other business deductions, you can’t cheat and take advantage of the system for your own profit. At home I use the equipment in support of my iOS development, web development, and any testing I need to do.

So what do I get for my last year?

This is the last year you can take advantage of this deduction, which really is a shame. But now that my side work is taking me to more and more demanding areas, such as Core Audio, OpenGL, and a little bit of video work, I feel that now is the time to invest in that dream machine I’ve always wanted and needed.

The question is, what’ll it be? Do I add on a cinema display to my laptop? Do I get a fully pimped-out quad-core iMac 27″? Or do I splurge and get both?  Based on my preliminary estimates for how much I’ll be owing in taxes, here’s my shopping list:

I’m probably going to wait until mid-December, or perhaps in January when I get back from my various weeks of travel.  What are your thoughts?  And if you’re a Canadian iOS business owner, what are you going to do to take advantage of the capital cost allowance?