Did you know that your company can lease equipment and still take full advantage of the Section 179 deduction? In fact, leasing equipment and/or software with the Section 179 deduction in mind is a preferred financial strategy for many businesses, as it can significantly help with not only cash flow, but with profits as well.
With a non-tax capital lease you can acquire and write off up to $500,000 worth of equipment this year, without actually spending $500,000 this year. The amount you save in taxes can actually exceed the payments, making this a very bottom-line friendly deduction (you are reading this correctly – in many cases, the deduction will actually be profit). A small business that is managing cash flow can leverage a non-tax capital lease and still take the Section 179 Deduction. Examples of non-tax capital leases include a ‘$1 Buyout Lease’ and a ‘10% Purchase Upon Termination (PUT) Lease’. In many cases, the amount you save in taxes will be MORE than the total of your first year’s payments.
***We are not giving tax advice, please contact your CPA or tax attorney for your specific case.***