Cash in on your tax breaks for company equipment

Looking to make an equipment purchase before year end? Or perhaps hoping to put some of the cash you’ve already spent on company equipment back in your pocket before 2010?

Read on to learn how…

As 2010 quickly approaches, companies are taking in all the money that they can, and sealing up their year-end plans to best prepare for the future. Many companies forget to take tax deductions that they qualify for into account in this planning process; more specifically, Section 179. “Section 179″ refers to Section 179 of the Internal Revenue Service Tax code, and can prove extremely profitable for companies. It allows them to deduct for certain purchases and expenses – in some cases, before they are even paid in full. Many see this as the best feature of the economic stimulus act, as it’s great to have the option of not making the full payment before year end so that you can opt for an equipment lease if cash flow is an issue.

Another benefit of the economic stimulus act is enhancements to Section 179 that allow for higher dollar limitation for equipment purchased before December 31, 2009. In addition, this deduction is not based on the number of days this equipment has been in service. Another perk that comes with Section 179: it allows a business to take a current year deduction on an equipment purchase instead of depreciating the newly acquired equipment over the course of several years. The bonus here clearly being that more money is back in your pocket, faster.

If you’re looking to make a big (or even small) equipment purchase, do it sooner than later! To find out more about Section 179, click here.

It’s smart to speak with your tax adviser to figure out what moves will be most financially advantageous to your company, and you may find yourself with a cash flow advantage in 2010.

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