Today, I want to talk about something us equipment leasing companies can easily do, and that’s combine loans. What I mean is this: you buy a widget machine in January, and you go through my equipment financing company. Great – we’re all happy, you’re making widgets (which are hot this year), and things are churning along nicely. Then, your company president decides it would be neat of you could also manufacture Blungets (which, if you are already selling widgets, makes perfect sense.)

So, you look into Blunget machines (goodness, are there a lot), and you decide on one. But wow, you’ve already got this loan for the widget maker, and it just seems like such an ordeal to have two loans going (your accountant is giving you that look). So what to do?

Well, really, this is no problem. In most cases, your equipment financing company will happily add the Blunget maker to your loan. Or make up a new loan with all of it – however it works out, the bottom line is, we’re really good at this sort of thing. Making equipment financing easy for you (and your accountant) is our specialty. And our pleasure. Oh, and like always, it’s just a few quick forms, and bam, you’re done, off making Blungets for a Blunget-starved populace.

Section 179 Update

I swear I can feel a tiny nip in the air… this means we’re turning into the homestretch of the year, meaning I have to mention Section 179 again. If you are thinking of buying new (or used) equipment, doing it now will allow you to take advantage of this generous tax deduction. Right now, the maximum deduction is $125,000, but that’s scheduled to drop to $25,000 next year. So buying your equipment and getting it into service before year’s end is paramount if you want to take full advantage of this. I’ll have a full post on Section 179 shortly with more details, but for now, keep in mind the deadline is approaching.

Not that you haven’t noticed, but the cold weather is long gone, and we’re on the brink of summer. In short, the year is half over already. Have you thought about Section 179 yet? Because you really should. Here’s why:

• The Section 179 deduction is still high, but not for long – As of right now, Section 179’s deduction limit is a healthy $125,000. But that’s only going to be true for this year. Next year, it’s set to fall to $25,000. We don’t know what’s going to happen in the future, but I’ll tell you this – if it were me and I was thinking of taking advantage of this tax deduction, I’d do it now. And that brings me to my second point.
• Romney is on Obama’s mind… Obama is on Romney’s mind – This is an election year, and the players are all set. And while I can’t predict the future (despite my big super bowl hit… really, can you believe I actually predicted that?), I do suspect that increasing Section 179 for this year or next is probably the furthest thing from anyone’s mind right now. Waiting for an increase could be a pretty bad gamble. There’s an election to win, and that’s going to be the only game in town.

The fact that Section 179 hasn’t been increased yet is telling. It says that the limits we see right now could very well be the limits we are stuck with. So if you were thinking of adding more than $25,000 worth of equipment over the next year or two, 2012 is the year you should do it. At the minimum, plan your 2012 purchases so you can take full advantage of the six figure deduction we have right now – if it increases next year, you can always take advantage of that then. But at the least, you’re getting your full deduction for 2012. Just remember, the equipment has to be purchased and put into use by midnight 12/31/2012. I know that seems far away, but we all know it’s not (after all, wasn’t last New Year’s Eve seemingly just yesterday?)

Enjoy the nice weather folks. It’ll be winter before you know it.

But seriously, I say it all the time – use Section 179 before it goes down, or even goes away. And while you’re at it, combine it with equipment financing to really get some bang for your buck. Over and over I say it, and I always warn that the gravy train may end.

Well, this time it did. Did you listen to me? Did you take advantage of Section 179 before the New Year? Because if you didn’t, you lost out. The Section 179 deduction WAS $500,000 for 2011. But you know how much it is in 2012?  $139,000. Yes, it went down that much (don’t yell at me – I had nothing to do with this – hey, I tried to warn everyone!)

But here’s the good news – that’s still a heck of a deduction. And it’s for 2012 only. In 2013, Section 179 is scheduled to go down even MORE – all the way down to $25,000. And it’s an election year – the politicians have a lot more to do this year than worry about amending Section 179, so there’s a good chance this is going to stay just like it is (in these times, with things like Occupy Wall Street going on, do you think business deductions will be all that popular with people? I know Section 179 is a good thing, but it can easily be twisted to be seen as helping wealthy people – after all, it’s still sometimes known as the “Hummer Tax Break”.)

So here’s my advice – take advantage of Section 179 THIS year. Don’t miss out again. Call an equipment financing company, get yourself an equipment lease, buy some equipment, and write it off. Take advantage of the six-figure tax deduction while it’s still here.

Have a great day, everyone!