Section 179 and Bonus Depreciation Help Boost Bottom Lines in 2016
Recent legislation impacted a number of tax provisions, including the extension of bonus depreciation through 2019 and a permanent reinstatement of the Section 179 deduction.
Growing companies are taking note and planning equipment purchases accordingly. But the strategy does not stop there. By combining the Section 179 deduction and/or bonus depreciation with an equipment lease, companies are able to increase profits while managing cash flows and smoothing out budget spikes.
By combining leasing and Section 179, companies can take a deduction (max: $500,000) for qualifying equipment and software without paying the full purchase price upfront. This also applies to the bonus deprecation benefit and can dramatically reduce your cash outlay for 2016, while achieving the highest possible tax deductions.
The amount you save in taxes with these provisions could be more than the amount you pay out of pocket for equipment and software this year.
At First American, we are helping companies achieve their growth goals through creative financing solutions, including coupling Section 179 and/or bonus depreciation with an equipment lease to enhance profits.