Maximize Savings With Tax Benefits on Year End Purchases
The end of the year is fast approaching. Thanks to Section 179 and Bonus Depreciation tax benefits, now is a great time to purchase the equipment your company needs. Below, learn more about these tax benefits and how to maximize your savings while selecting the right equipment for your business.
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%
In order to receive your savings from this deduction, all your equipment must be purchased and put into service by December 31, 2022, at midnight. Due to continued supply chain challenges, consider purchasing or leasing as soon as possible to meet this deadline.
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 and variety of lease options
What Type of Financing Option is Best for Me to Receive Bonus Depreciation?
When choosing financing options, consider capital leases or equipment finance agreements.
Capital Lease
For accounting purposes, the Capital Lease is treated as if the asset were purchased. This type of lease is similar to an installment purchase and includes a bargain purchase option of $1 at the end of the term. With the same tax treatment as a loan, you can depreciate the equipment while deducting the interest portion of the payment. At the end of the term, there are no sales tax implications since there is no transfer of ownership. Learn more here.
Equipment Finance Agreements
An Equipment Finance Agreement is a loan product that helps increase your overall profitability. An EFA benefits customers who desire immediate equipment ownership yet want to pay for the equipment over an extended period of time. Learn more here.
About Altec Capital
Altec Capital’s focus is meeting customers’ unique equipment financing needs. Not only does Altec Capital finance equipment, but it also helps customers manage and maintain their equipment fleet. While our core business is financing Altec products, Altec Capital also offers financing for light duty trucks and other non-Altec, third-party equipment.
Most importantly, financing with Altec Capital is easy. Altec Capital offers a single source solution for all your financing needs, which means no more managing multiple banking relationships. Altec Capital offers various forms of leasing. Be sure to ask about our signature product, the fair market value lease, which can shorten life cycles and save money, and its innovative e-signature and web-based application process make it easy for customers to obtain financing.
For more information on Altec Capital’s financing options or fourth quarter tax benefits, call (888) 408-8148 or email finance@altec.com.