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DGX, LLC
316 Communipaw Ave
Jersey City, New Jersey 07304 |
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Phone : 201-433-3390 |
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Fax : 201-433-4334 |
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Email : info@dgxllc.com |
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Leasing and Section 179
Did you know that your company can lease equipment and still take full advantage of the Section 179 deduction? In fact, leasing equipment with the Section 179 deduction in mind is a preferred financial strategy for many businesses, as it can significantly help with not only cash flow, but with profits as well.
Non-Tax | Capital Lease
The main benefit of a non-tax capital lease is that you can still take full advantage of the Section 179 Deduction, yet make smaller payments. With a non-tax capital lease you can acquire and write off $250,000 worth of equipment this year, without actually spending $250,000 this year. A small business that is managing cash flow can leverage a non-tax capital lease and still take the Section 179 Deduction.
Examples of non-tax capital leases include a $1.00 Buyout, and a 10% Purchase Upon Termination (PUT) Lease. In many cases, the amount you save in taxes will be MORE than the total of your first year's payments.
Advantages of Leasing and Financing
The obvious advantage to leasing or financing equipment and then taking the Section 179 Deduction is the fact that you can deduct the full amount of the equipment, without paying the full amount this year. The amount you save in taxes can actually exceed the payments, making this a very bottom-line friendly deduction. (You are reading this correctly - in many cases, the deduction will actually be profit.)
Act Now
The American Recovery and Reinvestment Act of 2009 have extended the one-year increase through the end of 2010. Unless it is extended, the Section 179 Deduction phases out completely in 2011, so if you want to take advantage of the higher limits, you need to act before the end of this year.
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