Section 179 yet again

By | August 31, 2011

Maximum  section 179 DeductionI just realized I’ve gone a few months without a Section 179 post, which is rather un-Fletch like. Because as much as I love equipment financing, I really love Section 179 – I think it’s the greatest tool for business since… well… ever, really. I mean, think about it – the government will actually give you back money because you bought something you needed anyway.

To reiterate something important, Section 179 was not just renewed for 2011 – it was enhanced.  Many of us thought it would go away, but instead (like a good horror movie villain) it came back bigger and stronger. Jason and Freddie have nothing on Section 179.

Here are a few finer points of what Section 179 can mean for you this year:

  • The Maximum Deduction is now $500,000. This is almost double what it recently was. Could you use a $500,000 deduction? Yes? Then go buy some equipment.
  • Do you need more than 500k in equipment? No problem. There’s a bonus first year depreciation, and it’s 100% after the $500,000 deduction is reached (this is up from 50% previously).
  • Total amount of equipment purchased can be $2,000,000 (that’s two million dollars). Needless to say, for most of us, that’s a LOT of equipment.
  • The deduction decreases on a dollar for dollar basis after the $2,000,000 cap is reached. This means it’s a true small to medium business deduction – if you are buying 10 billion worth of equipment a year, Section 179 won’t help you. But for most of us, it’s a HUGE deal.

Section-179-Calculation-for-2011

So how huge of a deal can this be? Look at the graphic on the right and see how a purchase of 650k of equipment really only costs $422,500.

Not bad, huh? Now here’s another neat thing: if you FINANCE the equipment (or lease it), this can actually be profitable this year. Because the $227,500 you save on your taxes is probably more than your finance payments for the year. That means it’s profitable to combine Section 179 and an Equipment Lease.

But like I said a few posts ago, time is running out. It’s late summer – we’re getting into “year end” pretty quickly. So if you haven’t yet, now is the time to start thinking about Section 179 (and some equipment financing as well.)

Remember... the Lease Guy wants you to always Share and Enjoy!!
  • Facebook
  • Twitter
  • LinkedIn
  • StumbleUpon
  • Reddit
  • Digg
  • del.icio.us
  • Tumblr
  • Google Bookmarks
  • Technorati
  • RSS
  • Add to favorites
  • Print
  • email

Leave a Reply

Your email address will not be published. Required fields are marked *