Leases and Section 179

 

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.

Equipment Financing
You may also obtain an equipment loan using an Equipment Finance Agreement (EFA) and still take the Section 179 Deduction.

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.)

Speak to an Expert
An experienced equipment finance company can help you structure your equipment lease (or equipment financing agreement) to take full advantage of the benefits of Section 179. Please call us at Audio Intervisual Design, Inc. and we can recommend another of leasing firms that may be able to advise you. 323 845-1155 or click here to email us!