You’ve recently run across the perfect piece of equipment to replace older equipment
in your business. Best of all, it’s reasonably priced. But your budget is tight
so you decide you’d better hold off on making the purchase.
But consider this – buying now could keep money in your pocket when you
claim the tax benefits.
With Section 179 of the IRS tax code, your tax deduction for new equipment placed
in service in 2011 may be as much as $500,000.
Bigger deductions mean less taxes
Taking advantage of tax strategies like the Section 179 deduction on equipment
purchases can help you cut your tax bill significantly.
In fact, the amount you'll save in taxes could be more than the amount you'll
pay in finance payments the entire first year.
Here’s an example:
Let’s say you buy a $30,000 piece of equipment during the fourth quarter. Tax
code revisions allow you to expense the entire $30,000 from your practice
revenue. The result is $10,500 trimmed off your taxes if you’re in the 35% tax
bracket.
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Here’s how it works:
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Equipment cost:
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$30,000
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Section 179 deduction:
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$30,000
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Tax savings:
(35% tax bracket)
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$10,500
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The changes to Section 179 of the IRS Tax Code can make acquiring any business equipment
a great business decision.
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