We’ve heard some good economic news lately, like how the GDP fell quite a bit less than expected (which means we’re back on the way up), and the fact that stock market continues to hold its own.
This pleases me to read, because like everyone else, I just get sick and tired of dire economic news. There is a definite placebo effect / self fulfilling prophecy aspect to it all, so anytime the news is good, I stand up and cheer. Listen, we’re all still here, and things are moving along.
So with that in mind, let me do my “every few months Section 179 reminder.” Really, if you look back in this blog, you’ll notice I tout Section 179 continually, because I personally think it’s a business’s best friend. Because Section 179 performs several “economic stimulus” (or is it stimuli?) actions at once.
First, it gets a business the equipment it needs right now – equipment that might be used to produce new products or services (or maybe better deliver/manufacture old products and services.) Or maybe the new equipment is the difference between turning a profit and not turning a profit.
The reason Section 179 lets people get equipment now is it allows them to take a full deduction on the equipment’s purchase price this year. And, the “higher Section 179 limits” put into effect in 2008 were extended. Meaning if you act this year, you get to take advantage of the most generous Section 179 limits yet.
Now, let’s throw in equipment financing (you knew that was coming.) If you finance the equipment, you only pay a portion this year (especially since the year is almost two thirds over). But you take the full deduction now. So you deduct the full price, but because you financed equipment (leasing works too), you only pay a small portion back this year. And the amount you pay back this year is WAY less than you deducted. You know what that is, right? Instant profit. Now you can see why Section 179 is so popular.
So I’ll repeat it – don’t forget Section 179. But if you do, I’ll be back again to remind you in a few months (weeks.)