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Financial services are available from Target Equipment Leasing, Inc.
Contact
or Phone: 248.553.0444 about these services.
www.TargetLsg.com
Stimulate Your Business!
Increased Section 179 Tax Benefits Extended Through 2009
The American Recovery & Reinvestment Act of 2009 is now law, and contains numerous favorable tax provisions to stimulate your business.
This means that your company can lease or purchase new or used equipment, and take full advantage of the Section 179 tax deduction.
Acquiring equipment at this time is an excellent financial strategy, especially for small and mid-sized businesses.
As a Member of the OneWorld Business Finance (OBF) Cooperative, we have ready availability of funding during this otherwise difficult period of obtaining credit.
Business Equipment
Business owners who acquire equipment, including machinery, computers, and other tangible goods, usually prefer a substantial deduction in a single tax year, rather than a little at a time over several years.
This accelerated deduction is known as the Section 179 deduction in the tax code.
The amount of qualified property that a business can expense under Section 179 was increased in 2008 to $250,000.
This incentive is for equipment placed in service between 12/31/2007 - 01/01/2010 and is designed for small companies.
The deduction phases out when a business purchases over $800,000 in one year.
Bonus Depreciation Extended Through 2009:
The law also created a bonus depreciation of 50% for qualifying assets. This is in addition to regular first-year depreciation.
Benefits of a Non-Tax/Capital Lease
The benefit of a Non-Tax/Capital Lease is that it can take advantage of Section 179.
You can expense up to $250,000 if the equipment is put in use in 2009.
In addition, you may depreciate any excess on the depreciation schedule for that asset.
Examples of Non-Tax/Capital Leases include a $1.00 Buyout, an Equipment Finance Agreement (EFA), and a 10% Purchase Upon Termination (PUT) Lease.
Example Calculation: Assume you finance $300,000 worth of business equipment, put it in use in 2009, and take advantage of Section 179. Your tax savings could be significant:
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Equipment Cost Example: | |
$300,000 |
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1st Year Write Off: | |
$250,000 | |
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($250,000 is the maximum Section 179 write-off in 2009) |
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50% Bonus Depreciation | |
$25,000 | |
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(On remaining value: $300,000 - $250,000 = $50,000; $50,000 x 50% = $25,000) |
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Normal 1st Year Depreciation: | |
$5,000 | |
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(Depreciation calculated at 5 years = 20%; $25,000 x 20% = $5,000) |
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Total 1st Year Deduction: | |
$280,000 | |
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($250,000 + $25,000 + $5,000 = $280,000) |
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| Tax Savings Assuming Rate of 35% | |
$98,000 | |
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($280,000 x 35% = $98,000) |
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The sample calculation shows how taking advantage of Section 179 can significantly lower the true cost of equipment ownership from $300,000 to $202,000.
For the specific impact to your company, please contact your tax advisor.
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Act Now!
To learn how your business can take full advantage of Section 179 and Bonus Depreciation Incentive, contact us today for a free consultation.
We provide financial solutions so that you can acquire the equipment your business needs to prosper and grow.
Section 179: Tax Savings Extended Through 1/1/10
What is Section 179?
Section 179 of the IRS tax code permits businesses to deduct the full purchase price of qualified equipment that was purchased or financed during the tax year.
In other words . . . if you buy (or lease) a piece of qualifying equipment you can deduct the Full Purchase Price from your gross income on your tax return.
This tax incentive was created by the US Government to encourage businesses to buy equipment and invest in themselves.
Contact us at 248.553.0444 ask for Linda your AMDA specialist.
Contact
or Phone: 248.553.0444
about your leasing and financing needs.
www.TargetLsg.com
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