Summertime Section 179

By | July 8, 2019

Let’s talk about Section 179 and equipment financing for a few minutes. Because the 2019 calendar says summer is here, and that means something very special. 

Economic Stimulus Act and tax section 179

It means that if you finance equipment and take the Section 179 deduction, you will likely save MORE in taxes than you will pay out in monthly payments for the rest of 2019.

In other words, say you bought a piece of equipment for $65,000, financed it, and took your Section 179 deduction. Using this handy dandy Section 179 Calculator, we see that your tax savings is $22,750 in raw dollars. 

Your monthly payment will vary by loan length of course, but let’s assume a payment of $1,250 a month.  Depending on when you buy it this summer, you will probably make 4-5 payments this year. So, at that payment, you’ll pay out $6,250 tops. 

So you financed equipment, saved $22,750 on your taxes, and paid out $6,250 in finance payments for 2019. $22,750 minus $6,250 equals $16,500.

That’s how much larger your bank account is because you financed equipment and used the Section 179 deduction.

This isn’t fantasy. This is very, very real. If you did NOTHING AT ALL, your 2019 bank account would be $16,500 less.

But instead, you financed equipment.  And got to use it (which hopefully increased your productivity and revenues.) And because you bought and used it, your bank account is $16,500 larger than it would have been otherwise.

I cannot stress enough how powerful this can be for your business. And not only because it works in your favor in raw dollars for the current year. It’s also the fact that you get the equipment, and get to use it, without it costing you a dollar for a long, long time. 

In other words, you saved $22,750 in taxes. Until you make $22,750 in payments, you didn’t actually reach into your pocket for the equipment. That’s approximately 18 months at our example payment of $1,250. And in that 18 months, that new equipment enhanced your business and your revenues. 
I talk about Section 179 financing a lot in this blog, and hopefully, you can clearly see why. Smart businesses do this every year, due to the details outlined here. Section 179 and equipment financing is simply that good. Use it.

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