Section 179 Tax Savings for Banleaco Customers

Equipment financing can bring small businesses big tax savings

The recent changes to the IRS tax code have allowed small business owners to reduce their tax liability when purchasing new equipment.

The Internal Revenue Service’s Section 179 Deduction lets businesses deduct up to $500,000 of qualifying equipment purchases in the year the equipment is put into use. The deduction can result in significant tax savings even for small businesses. Even equipment that is 100% financed is eligible for the deduction.

The tax savings can have a big impact on a bottom line. Often the deduction is enough to cover the sum of the payments for the entire first year.

How Section 179 benefits you*

Let’s say you are considering new software for your business at a cost of $25,000. You don’t want to tie up all of your cash or your lines of credit so you decide to finance. You secure financing through Banleaco, take delivery of the equipment and put it into use in the 4th quarter of the year.

Assuming you are in the 35% tax bracket your software purchase could save $8750 in federal taxes. ($25,000 for the software x 35% federal tax)

Your first year's total payment would be $5926 if you chose the 60 month term.

The difference between the tax savings and the first year's total payments is a staggering $2824! The tax savings from the software would cover the sum of the payments during the first year AND leave almost $3000 in your pocket.

If you are looking to make your money work for you contact Banleaco.  If you are looking to learn more about Section 179 benefits, please contact your tax adviser for current laws or learn more at www.irs.org.

*It is recommended to consult your tax adviser regarding your specific tax situation and to obtain the most current up-to-date details.