If you acquire equipment for your business, like machinery, computers, and other tangible goods, more often than not you would prefer to deduct the cost of the equipment in a single tax year. This beats the alternative of deducting a little at a time over a number of years.
The deduction that we are talking about above is known as the Section 179 deduction of the tax code.
Section 179 allows businesses that spend less than $2,000,000 a year to write-off up to $500,000 of qualified equipment as of 2013. (Note: You cannot write off more than your taxable income.)
Benefits of a Capital Lease
If you decide to take advantage of a Capital Lease then you can take advantage of Section 179 as it is laid our above. You would be able to expense up to $500,000 (if the equipment is put in use in 2013). Use the calculator to the right to see how significant your tax savings could be!
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