If you’re thinking about purchasing packaging equipment this year, how you plan to finance your expenditure could provide your business with substantial tax benefits.
At Holland Packaging, LLC, we partner with a packaging equipment leasing company to provide you options that can truly preserve your cash reserves.
And, your business equipment lease can be especially beneficial using the updated tax rule called the Section 179 Deduction.
This U.S. tax incentive was created to encourage business growth and can make a big difference to businesses that normally would put off a capital expense while seeking to expand.
The Section 179 Deduction for 2021 is now $1,050,000 with a $2,620,000 equipment spending cap.
While these limits are an increase over 2020, we want to talk about the advantage of what’s called Bonus Depreciation.
Bonus Depreciation is the ideal way to increase business cash flow while reaching long-term business goals.
In the past, when businesses purchased qualifying equipment, they could only write off a little at a time over several years through diminishing depreciation.
However, the Section 179 Deduction tax code allows businesses to deduct the full amount of a qualifying purchase in the same tax year.
This means that certain leases will qualify, allowing you to write off 100% of the purchase price.
This is a huge advantage for businesses looking to expand through leasing.
It’s important to note that you will only be able to take advantage of the 100% Bonus Depreciation until January 1st, 2023.
After that, the diminishing depreciation tax code will return.
Your tax advisor or accountant and help you determine the type of lease which would be most beneficial for your business and long-term financial success.
Our leasing partner, SLC Equipment Financing has provided us with this brochure to help you further understand the Section 179 Deduction. They will also assist in structuring the right lease tax advantage option to give you low monthly payments for your business upgrades while preserving working capital.
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