How a Year-End Equipment Purchase Can Benefit Your Business

With the end of the year quickly approaching, many companies are already thinking about potential savings through tax deductions, specifically bonus depreciation.

Check out these tips below to help you figure out how to maximize your savings while selecting the right equipment for your business needs.

What Bonus Depreciation Means for End of the Year Savings

Bonus depreciation allows businesses to deduct a more significant percentage of the cost of their purchased assets the year they are acquired instead of depreciating them for years.

Currently, bonus depreciation is at 100%, meaning if you purchase a piece of equipment by the end of the year, you may be able to deduct the full amount of your purchase.

According to the official website of the IRS, bonus depreciation “applies to business property acquired after September 27, 2017, and placed in service after September 27, 2017, and before January 1, 2023. ”

Starting in 2023, bonus depreciation will be reduced to the following rates:

  • 2023: 80%
  • 2024: 60%
  • 2025: 40%

Overall, if taken advantage of, this favorable depreciation deduction will deliver tax-saving benefits to many businesses in 2021.

Consider the Timing of Your Purchase

In order to receive your savings from this deduction, all your equipment must be purchased and put into service by December 31, 2021, at midnight. With the continued pandemic, it’s important to note supply chain issues are still widespread. Deliveries are taking longer than expected, leaving many customers unsure whether or not it is the right time to buy. To avoid any uncertainty, we recommend purchasing or leasing your equipment as soon as possible.

Think about Different Types of Equipment you Need 

Buying equipment that is already in stock can also help alleviate any worries regarding end-of-year delivery.

Based on your budget and needs at the jobsite, Altec has several used and new pieces of equipment available for:

Keep in mind, bonus depreciation is currently offered at 100%. This option is only available for a limited time and is available for both new and used equipment.

 Financing Options for your Business

If you’re interested in applying these tax benefits to your purchases, our knowledgeable finance experts at Altec Capital are ready to help you find the best options to achieve significant savings. If you want to take delivery at year-end, any equipment purchased through Altec Capital can be secured with no up-front down payment.

Altec Capital Financing offers:

  • Deferrals up to 90 days
  • Aggressive financing rates
  • A variety of lease options

What type of financing option is best for me to receive Bonus Depreciation?

Using a tax lease in the 4th quarter is a great way to take advantage of Altec Capital’s best rates of the year. As a reminder, all qualifying assets will need to be financed and placed in service by December 31 at midnight.

Call (888) 408-8148 or email finance@altec.com if you have any questions about Altec Capital lease options or 4th quarter tax benefits.