How Equipment Leasing Is a Tax Benefit to You
Running a business comes with a laundry list of tasks that need to be completed. There are staff issues, client issues and, of course, equipment issues. When deciding what type of equipment your company needs to run efficiently and productively, there are different ways of obtaining this necessary equipment. Obviously you could buy it, but Equipment Leasing has become a popular way of fulfilling your office needs and also tapping into some additional benefits.
One of the biggest benefits of Equipment Leasing is its tax benefits. Leasing is usually 100 percent tax deductible. It might seem like a good idea to own your company’s equipment, but most equipment depreciates over time. Internal Revenue Code 179 gives your business the opportunity to deduct the entire price of financed or leased equipment for the current tax year. You also can usually deduct your company’s software for the same time period. However, there is one catch. The leased or financed equipment must be within a specific dollar amount, and it must be put into use in the same year you want to take the deductions. IRS.gov offers you details on these deductions.
Another advantage to Equipment Leasing is that it gives your company a chance to stay current with today’s technology. If your company requires the latest technology to stay competitive, than the leasing option makes it easier and quicker for you to update technology. If your company needs to update equipment when the new year looms, this option allows you to avoid being stuck with old technology.
Do you remember a time when you purchased a piece of equipment for your office, and it stopped working right after the warranty expired? Why bring this potential stress to your office again? Leasing allows you to avoid the headaches of maintenance. When a piece of equipment breaks down, the leasing company takes care of the repair.
When you decide to lease, you don’t have to worry about coming up with a large amount of money to put down on new office equipment. Your payments are more predictable and make budgeting easier over a long period of time.
While there are a plethora of benefits when it comes to Equipment Leasing, there are some drawbacks that should be noted. Sometimes product available is limited; the model you want could be out of stock, or not carried at all. Also, while you will not have to pay for maintenance, you’ll have to have maintenance and repairs handled on the leasing company’s timetable, which might not be ideal for your company. To decide whether or not leasing is right for your company, a thorough evaluation of your company’s plans and needs should give you an answer.