It is getting time for businesses that run on a calendar fiscal year to consider equipment needs, and space planning for next year. There is a little known tax incentive Section 179 that allows greater tax benefits to small and midsize companies looking to expand.
There are strategic advantages to leasing a new our used modular building versus purchasing one.
The US government has put a program together, Section 179, specifically for small to mid-sized business owners allowing them to expense or deduct their full equipment purchases from the same year tax return or “gross income”. Modular Solutions, Ltd has great partners that can help structure a tailored finance agreement which will allow you to expense the full amount, 100% of the equipment on this year’s current tax documents and you have the flexibility to pay off the remaining equipment amount either quickly, in as little as 2 years or as long as 8 years!
Enhanced Expense Limits, Section 179, 2014
This year’s deduction limit, as of January has taken a dramatic drop. The maximum equipment cost that may be written off is $25,000. The maximum amount that your business can spend to qualify is $200,000 total on equipment. For brand new equipment only, the bonus depreciation rate is 50%. However we are remaining optimistic that legistaltion may increase limits before year end.
Section 179 Background
Section 179 was originally referred to as the “SUV/Hummer deduction.” It was used to offset the cost of an SUV or business vehicle costs, which was included in the “Stimulus Act.” The Stimulus Act was created to improve the economy and although it continues to change, it is the most beneficial tax benefit for small businesses in particular.
The property must be Tangible Personal Property, and must be used for the business at a rate greater than 50%. New or used equipment is accepted. It is probable that businesses purchase Tangible Personal Property consistently: Equipment (machines, etc.), modular buildings, manufacturing tools, vehicles, software, and furniture.
Section 179 Tax Deduction is filed under IRS form 4562.Don’t forget to keep complete records of; lease agreement, purchasing details, acquired & delivery details of your business equipment!
*Tax information provided above is intended for educational purposes only. Please consult tax attorney for expert advice.* Leasing information courtesy of ILS one of our great leasing partners.
For more information contact our team:
Modular Solutions, Ltd
Phone: 800-441-8577 x 1