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Finance Business Equipment and Pay Nothing
Most companies no funds to purchase the appropriate equipment. Therefore, they use their current cash flow and purchase of equipment, and pay over time.
If the new equipment brings more revenue or lower costs than the equipment costs, this is a win-win operation.
However, many companies do not understand, and the United States Internal Revenue Code Section 179, companies can reduce the amount exceeds the total amount of equipment the first year of the amount of income tax!
The most obvious advantage, financial lease or equipment, then to 179 deduction, you can not pay the full amount of deduction for the full amount of equipment this year. This amount can save you more than the tax actual payment, making it a very friendly and reduce the bottom line. "
If you have funds to purchase equipment for your business, even if you do not buy pre-paid amount, your business can take advantage of the IRS Code, section 179 of the edge. Therefore, the depreciation of equipment, rather than the life of equipment in a small percentage of the cost, you can take the total amount (again, even if you do not pay all in advance) up to 25 million as a tax deduction to your income.
This was 25 million this year (2008) only. In 2009, the amount of resort back to the normal 15 million. In addition, write down the equipment to be acquired this year - did not carry forward.
The device does have 'qualifications. Qualifying equipment includes: most of the equipment (and mechanical) of the business use. Can also be used in personal devices business. Can be commercial vehicles, computers, software, office furniture, office equipment. In addition, the large-scale production equipment and tools can also be supported under the IRS code.
Your business income is reduced, means reducing the amount of your income tax payment. Reduce the tax burden, higher profits!
At 179, a company can deduct or depreciate the cost of equipment, a small part of each year; more spiritual cost savings for many years. Under section 179, companies can deduct the full amount limit of 250,000 U.S. dollars as of the first year. Think: You deduct, under the old rules, a 200,000 U.S. dollars, or 20% of the pieces of equipment. This is equivalent to reduction in the taxable income of 40,000 yuan, or 35% tax rate, net revenue 14,000. On the other hand, after deducting the full amount has decreased by 20 million to purchase the amount of taxable income, resulting in 35%, the increase in profits 70,000!
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