With more and more states opening back up for business, now is the perfect time to look at expanding your company’s capabilities. Circumstances have come together to make this an ideal time to buy new equipment to either expand operations or replace older, outmoded models.
Write Off Your Equipment Costs
In the past, equipment for a business had to be written off through depreciation over a span of years. So, a $100,000 purchase would be depreciated $20,000 at a time over five years. While any write-off is welcome, newer options make it easier to get back your investment on new equipment faster.
Under a part of the tax code known as Section 179, businesses are able to write off 100% of their costs to buy or lease industrial equipment in the current tax year. For 2021, this tax deduction is available for 100% of purchases up to $1,050,000. The full deduction can be taken by businesses buying up to $2,620,000 this year. The benefit begins to phase out after that on a dollar per dollar basis with a limit of $3,670,000 in total equipment leases and purchases for the year.
Section 179 allows companies to deduct the cost of their equipment from earnings the year they lease the equipment or buy it. The ability to write this off in the same year can significantly reduce the impact on your bottom line.
The deduction can be used for both new and used equipment. And, a wide range of equipment purchases qualify. The deduction is open to all businesses that buy, lease or finance new or used equipment in 2021.
Additionally, Bonus Depreciation is being offered as part of the Tax Cuts and Jobs Act. This bonus is offered in many years, with different amounts available each year. In 2021, the bonus depreciation is $100,000. This year, the bonus can be applied to both new and used equipment.
Low Rates Make Financing Affordable
We are also currently enjoying low interest rates on industrial equipment loans. With people eager to get back to full production, this is an excellent time to buy. The Fed has kept interest rates low in order to encourage businesses to make the expenditures that they need to increase their capacity and thrive.
At ENG Commercial Finance Co., we have a range of financing options available to help businesses get the equipment that they need. We can help with financing to purchase equipment. We also offer options that include capital lease and operating lease agreements that allow the ease of financing while keeping the accounting benefits of leasing.
ENGS Commerical Finance Co. provides equipment financing you can count on. We’ll find you the funds that you need at a rate that fits your budget now and in the future. Get in touch today to learn more about what we can do for you.