26th Nov 2007
Tax advantage to equipment purchase - act before 12/31
There is a little-known section of the IRS Code that gives small businesses a break on equipment purchases. It’s called Section 179. Here is how it works:
If you buy equipment for your practice, up to $500,000 this year, you could deduct a portion of the cost, up to $125,000 on your taxes. Here is more detail on what equipment can qualify, from Crest Capital:
“Tangible Goods financed by Equipment Loans or by most types of Equipment Leases (Non-Tax or Capital Leases) qualify for this deduction. Examples of Non-Tax (Capital) Leases include a $1 Purchase Lease, an Equipment Finance Agreement (EFA), and a 10% Purchase Upon Termination (PUT) Lease.”
The “catch,” if there is one, is that the total cost of the equipment you want to expense can’t be more than your total taxable income. To see how this deduction might affect your new practice, click on this link for a deduction calculator:
http://www.crestcapital.com/tax_deduction_calculator
For more information on this and other tax questions for your small business, check out my favorite tax link: www.taxgirl.com.
And of course check with your tax advisor. This is one of those things you can’t make a New Year’s resolution about. You just need to do it now.
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