It’s not often that the IRS offers shop owners a chance to save money…but you need to act fast. The U.S. Congress recent bailout bill has no provision to extend the Section 179 expense deduction into 2009.
Between now and December 31, 2008, body shops have a money-saving window of opportunity for the IRS to share in the cost of equipment purchases. How? By using a Section 179 expense deduction, which permits a deduction of up to $250,000 in calendar year 2008.
Check the table for two examples of how this deduction can benefit both your checkbook and your business.
Be aware that Section 179 has limits based on your business income. In certain enterprise zones or renewal community businesses, the deduction may be even greater. See your accountant to maximize the tax advantages of Section 179 based on your specific business needs.
Combine the Section 179 deduction with a leasing program and you’ll find that the tax benefits quickly escalate. Monthly payments permit you to pay for new equipment out of the increased profits generated by your improved productivity.
Lease payments are tax deductible, allowing you to finance new equipment over an extended period to minimize cash outflow. In essence, your increased monthly profits pay for the equipment you’ve purchased.
Leasing is often an easier way to acquire equipment rather that an outright purchase, which requires much more cash upfront. Metropolitan Car-o-Liner has arrangements with leasing companies at competitive rates to keep your time and paperwork to a minimum.
With year-end rapidly approaching, call Metropolitan Car-o-Liner today to learn more about leasing as a means to minimize your cash flow and maximize cash inflow.
Art Henning, president of Henning Consulting, Inc., has over 40 years of accounting, financial, and business
experience in private industry and public accounting.