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.

It’s time for my annual “Fletch Predicts” post, where I’ll make a few predictions for the incoming year.

Like always, let’s start with sports:

Sigh… there was a time when I really nailed these. But I missed everything in 2018, and have to go back to mid-2017 to find my last winner. But I’m feeling good about these picks, so you folks headed to Vegas take note.

In football, we’re going with a New Orleans vs. San Diego Super Bowl. I know everyone was on the Rams and the Chiefs bandwagons all year, but they don’t have the defense to make the big game. And who wins the Super Bowl? I like Philip Rivers to get his ring, so go Chargers!

Next up are hockey and basketball, since their championships occur in the late spring / early summer.

Let’s go unconventional (and old-school) in basketball and say we trust in the process, and the Philadelphia 76’ers take home their first title since Dr. J and Moses Malone were there.

I have never hit a hockey pick, but I don’t feel bad about that, because it’s easily the hardest of the four major American sports to predict. We’ll go old school again and say the Boston Bruins win it all.

I love baseball. Some other sports do excitement better, but there’s nothing like a summer day at the ballpark. I picked the Yankees last year, and they got bumped in the playoffs. Let’s do it again – the Bronx Bombers win in 2019.

Onto the economy – there will be two rate hikes in 2019, with talk of a third that may or may not materialize. The economy will continue to chug along strongly, despite political upheaval that’s inevitable when the new Congress is sworn in. We’ll also hear whispers of a recession (like we are right now), but I believe that’s more because of the “can’t go anywhere but down” mentality than anything. Mark my words – 2019 will be a good year for businesses.

Last year, I talked about Bitcoin, but that seems to be over with for now. It’s been so rocky that nobody is going to trust it once it rises again. It may be the “future” (tech guys still insist the blockchain is the most secure way for monetary transactions to be handled), but it’s going to need time to become mainstream.

Construction surprised me a bit this past year, and I see that industry moving forward a bit more in 2019.  Health, tech, and energy all look good for 2019 as well. Sustainable / renewable energy could really surprise as more and more companies see fossil fuels as an “old” tech. And speaking of old/new, Artificial Intelligence (AI) makes big strides this year as an industry.

Section 179 doesn’t need a mention (oops), as it’s staying at a robust $1 million for 2019. So plan your purchases in advance, knowing it’ll be there for you.

Ok, there we go – Fletch Predicts for 2019. Hope your year has started off great!