Tax Benefits of Equipment Leasing

Tax Code Section 179

There are many benefits to leasing equipment for your business as compared to purchasing. For starters, leasing equipment helps you conserve your operating line at the bank – but there are tax benefits as well. Tax Code Section 179, allows business owners who acquire new or used equipment for their business to deduct the cost in a single tax year as opposed to smaller amounts spread over a number of years. This includes machinery, computers, and other tangible goods.

In addition to conserving your cash, working capital and credit line, there are additional benefits to equipment leasing for your business whether you’re in the commercial, industrial, construction, or farm and agriculture industry:

Pay For What You Use – Monthly payments allow you to use your equipment immediately and you’ll only be paying on that equipment for as long as you are using it.

Equipment Upgrades – Leasing typically provides you the most up-to-date equipment, allowing for more efficiency.

Budgeting – Limited budgets can make the purchasing of equipment a lengthy process, holding up jobs you need to start today. Leasing allows you to acquire the equipment through a fairly quick budget approval process thanks to the smaller monthly expense.

For the specific benefits equipment leasing can have on your business, contact your tax advisor or visit www.irs.gov.