The end of the year is approaching which means there are a few things you don’t want to miss on your checklist. Gift shopping, holiday menus, and year-end spending are just some that come to mind. While we can point you where to find some nice green and yellow gifts that come loaded with horsepower (try here), we can also give you some helpful advice on how to take full advantage of certain tax benefits.
These tax codes can make a big impact on spending for most businesses. But that’s why they exist! The government has these policies in place to encourage businesses like you to purchase the tools and equipment needed to invest in themselves and support the economy. It’s a win-win!
Potential Tax Benefits to Take Advantage Of
At Greenway, we want to make sure you are using every chance you can to benefit from our equipment and your taxes. These two potential tax benefits allow you to save money on both new and used equipment.
Section 179 provides an allowable deduction limit on the cost of new and used capital equipment.
According to Section 179, this tax code allows businesses to deduct the full purchase price of qualifying equipment purchased or financed during the tax year rather than writing it off over depreciation. That means if you buy a piece of qualifying equipment, you can deduct the full purchase price from your gross income.
Most businesses qualify for this tax code, but be sure to check online or contact tax advisors to make sure you meet the requirements.
Bonus Depreciation enables customers to take additional depreciation on new and used (new to you) capital equipment purchases.
This tax benefit has a very similar purpose: to deduct the full price as well as other available depreciation, all in the same year. If you qualify for this code, it’s your lucky year. Bonus Depreciation has been increased from 50% to 100% for 2020.
Although these two tax benefits have the same goal in mind, there is one key difference that sets them apart. Section 179 is put in place to expense the cost of equipment while Bonus Depreciation works to recover that cost over time.
Why use these tax benefits on our equipment?
When comparing the costs of writing off acquired equipment over time to writing it off all at once using these tax codes, the difference is pretty significant. If you still have some year-end spending left in your budget, purchasing equipment here at Greenway will allow you to reap these benefits.
We only want the best of the best for our customers, which means the best equipment at the best price. We are proud to offer John Deere lines that cover all agriculture, landscaping, and compact construction needs. Our team wants you to succeed, and we think that your success starts with the right equipment.
If you would like more information on how these benefits might impact your individual situation, be sure to consult your tax advisor.
