• First up on my list is always Section 179. But I really don’t need to put it here anymore, because it was made permanent in 2017. Still, I’m used to having it high on my list, so I’ll wish for it to grow even larger!

(oh, and remember to use your Section 179 deduction for 2020! You have until midnight 12/31 to buy or finance your equipment and put it into service.)

• I want rates to stay right where they are. They are historically low right now, and I hope they stay there. Of course, I know this truly is a “wish”, as rate fluctuations are inevitable, but let’s hope they are slow (prediction: any increases will be slow indeed). 

• I wish for more equipment sellers and distributors to see how offering financing can help them. As we move forward, making things simple and being a “one-stop-shop” for B2B customers can only help. I feel a beefier blog post about this coming on.  

• Like everyone else, I want us to have a virus vaccine. It looks like that might be imminent. Good. I suspect after that happens, there will be a mini boom. Get ready for it. 

• On a personal level, I got into vinyl records awhile back, and would like a new turntable this year. Mrs. Fletch said “pick another gift – things are too loud around here as it is”. What is this “too loud” she speaks of? Not in my vocabulary. 

The holiday season is always pretty busy for everyone. But it is also a good time to take stock in the year that was, and the road ahead. Despite the turmoil of 2020, I am optimistic about 2021, and what lays ahead. We’re all fortunate to be in business, and while we cannot control outside forces, we can control how we react. 

Enjoy the next few weeks – they’re always fun!

I talk about this every year, because I get really excited about it. We’re in that time of year where it’s actually profitable to finance equipment and take the Section 179 Deduction. Here’s what I mean:

You buy equipment and finance it with us. Let’s say it’s $50k. 

You take the full $50k as a Section 179 Deduction.

At a 35% tax rate, that $50k deduction translates into $17,500 saved on your taxes. These are actual dollars that stay in your account instead of going to the IRS. In other words, if you *didn’t* buy the equipment, you’d be paying the IRS $17,500 more.

So ok, you have an extra $17,500 in your account. And since you financed the equipment, you’re only making a payment or two for the rest of 2020. Let’s say those two payments total $2,400. If we subtract that from the $17,500, we get $15,100.

So the bottom line is this: in 2020, you A) got a new (or new to you) piece of equipment you needed, and B) have an extra $15k in your bank account for doing so. 

All of a sudden, 2020 is looking better and better, huh?

You can look at Section 179 a few ways. Had you paid cash for the equipment, you’ll still get the $17,500, but you laid out the full $50k. You can look at the $17,500 as a discount (meaning you really only paid $32,500 for the equipment).  

But in my example here, by financing the equipment, you actually have $15k MORE in your bank account than if you did nothing. And you know what? That $15k will probably cover all of next year’s payments too. And, of course, in all this time of the payments being covered, you are using the equipment to grow your business. 

When finance guys talk about “leverage”, they typically mean things like this.

So yes, you too can end 2020 on a great note. Get something you need. Finance it. Then take that sweet Section 179 Deduction (you can deduct up to $1,040,000 for 2020 – that’s a million, forty thousand.) Just make sure you have the equipment installed and in service by midnight, 12/31/2020.

Happy shopping!  

My wife even asked “are you ok, you don’t seem like yourself”, to which I replied “I’ve been ignoring Section 179”… ok, I’m kidding there. Old Fletch knows that wouldn’t be great dinner conversation. But it is true that I haven’t talked about Section 179 in awhile, so let’s do that.

In all that has happened this year, it’s easy to forget about great tax incentives like Section 179, but it’s still here, it’s still valid, and it’s bigger than ever, with an inflation-adjusted maximum deduction of $1,040,000 (that’s a cool million and forty thousand). The maximum equipment purchase is sitting at $2,590,000. Those are nice big numbers that all small businesses can be happy about. 

For small and medium businesses, this can be very attractive for 2020. Many businesses have had to retool and purchase equipment they didn’t count on purchasing. Think about things like plexiglass dividers for retail counters, maybe outdoor seating and furniture, or retrofitting the office to spread things out. 

Some businesses are even buying their workers office equipment to use at home – desks, computers, printers, etc. These are Section 179 eligible (check with your accountant of course, to see the percentages. In other words, if a company buys an employee a new computer, but it will be 25% personal use, there may be an adjustment in the deduction.)

Like all entities, the IRS has offices running on smaller crews and such, but they are still operating, and Section 179 is an unmovable part of the tax code. So it’s here for all of 2020 and beyond. Plus, it’s not affected by any other government assistance or program – for example, if you got a PPP loan, that does not affect your Section 179 deduction. 

2020 has been a strange year so far. But Section 179 is as strong and “normal” as ever. And that’s reassuring, isn’t it? 

But no, the calendar is flipping again, and that means it’s time for the 2020 edition of Fletch Predicts.

The first thing I usually do is sports predictions. I was on a bit of a streak 2-3 years ago, having nailed several in a row, but came up dry the last few years. This is the year we get back on track.

As you read this, the NFL playoffs are the big news. And Fletch says The Big Easy is poised for another title. Yes, we’re going with the New Orleans Saints. I know everyone is on the Baltimore Ravens bandwagon and their world-class quarterback Lamar Jackson, but I’m going with the old vet in Drew Brees.

I have been on a Yankees World Series win prediction for a few years, which has fallen short, but I see no reason to stop now. So in 2020, the world’s most popular (and despised) baseball team wins another title. Especially since they signed a true #1 ace in Gerrit Cole. 

For the first time in many years, basketball is wide open. The conventional wisdom says pick the LA Lakers and LeBron, but I’m going with the “other” LA team – the Clippers take it home, and win one for Steve Ballmer, a notoriously good / fun guy. I’d love to hang out with Steve for a day.

Hockey… easily the toughest to predict. It seems every year, any one of a dozen teams can legitimately win the most famous trophy in sports, Lord Stanley’s Cup. I do not like picking the same city twice, but the NY Islanders seem to have a little magic. We’ll go with them.

Ok, let’s talk economy. We’ve been riding quite the high since 2016. Regardless of your political leanings, it’s undeniable that businesses in general have been doing well these past few years. 

Myself (and pretty much everyone else) thought “The Fed” would increase rates in 2019 (after four increases in 2018). Instead, they were lowered three times. So your guess is as good as mine as to what will happen – right now, I think things will remain static for a while. The upcoming presidential election will carry a lot of buzz, so hopefully the Federal Reserve takes a little break.    

I predicted a few years ago that Virtual Reality technology would take a big leap. I was a little early, but 2020 looks to be a big year for VR, because we’re now starting to see wireless VR headsets. THAT’S the key – make it easy, comfortable, and keep users un-tethered. These things will fly off shelves next holiday season.   

Ok, there are my predictions for 2020. Hopefully, if you visit Vegas you’ll take some advice, and also buy some stock in VR companies. 

Oh, and finance equipment now while the rates are low!