Section 179 Decoded

Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income.

The purpose behind Section 179 - to motivate the American economy (and your business) to move in a positive direction. For most businesses (adding total equipment, software, and vehicles totaling less than $139,000 in 2012), the entire cost can be written-off on the 2012 tax return.

The total amount written off ($139,000 in 2012), and limits to the total amount of the equipment purchased ($560,000 in 2012). The deduction begins to phase out dollar-for-dollar after $560,000 is spent.

All businesses that purchase, finance, and/or lease less than $560,000 in new or used business equipment during tax year 2012 should qualify for the Section 179 Deduction. If a business is unprofitable in 2012, and has no taxable income to use the deduction, that business can elect to use 50% Bonus Depreciation and carry-forward to a year when the business is profitable.

The most important difference is both new and used equipment qualify for the Section 179 Deduction. Bonus Depreciation covers new equipment only. 

The equipment, vehicle(s), and/or software must be used for business purposes more than 50% of the time to qualify for the Section 179 Deduction. Simply multiply the cost of the equipment, vehicle(s), and/or software by the percentage of business-use to arrive at the monetary amount eligible for Section 179.

2012 Deduction Limit = $139,000 For new and used equipment, as well as off-the-shelf software.

2012 Limit on equipment purchases = $560,000 This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced.

Bonus Depreciation = 50% This is taken after the $560k limit in capital equipment purchases is reached.   Bonus Depreciation is available for new equipment only. Bonus Depreciation can also be taken by businesses that will have net operating losses in 2012.

Contact us for a bid on your capital purchase before year end.   Don’t miss out on Section 179 deductions and Bonus Depreciation 801 816 0800

Understanding Equipment Lease and Finance

Anyone who runs a business should understand how equipment financing can be as beneficial as it is. Here are a few things to see when getting equipment financing to work. These should be reviewed because they show just how effective financing can be for any type of business that needs to get its items sooner without having to pay for everything right up front.
The first part about equipment financing is that it works to ensure that a line of credit is available for a business. This is where a business can easily pay off a certain piece of equipment over a period of time. This can be done while the new equipment is used to create more profits for a business to work with.
Also, the money that is used will be covered in full in a plan. This means that all costs for building and delivering the equipment to a place will be covered. This can work to make it so anyone can get a good profit off of something that it needs for its operations.
Also, the payments in equipment financing will stay the same over time. This may be used to keep a business from suffering from the dangers of inflation. Inflation can make some equipment items higher over time. Using equipment financing will help to protect the business from losing money as the value of something goes up. This is all thanks to how the equipment will be of the same price.
Also, many of the equipment financing payments that a business makes can be tax deductible. This may be used to ensure that the business can save on tax payments. A big point of this involves how these payments might involve interest in some cases.
Of course, the best benefit of this plan involves how it will get a business to receive what it needs sooner. A business will get something quickly without having to wait too long to get it to work. It will be able to get something out to a business as quickly as possible, thus making it easier for the business to get profits off of the equipment that it needs. This may be beneficial for the bottom line of the business and even the customers who want to get this out of it. This is all thanks to equipment financing.
These are all good reasons why equipment financing is such a good thing to get into. This type of financing can be used to get any business to receive the money that it needs for different kinds of items that it needs in order for it to be more profitable and successful. Capital lease financing provides many flexible options that can meet business and financial goals.  Be sure to watch for this when getting any type of business to become more successful and able to operate properly.

Consider Leasing for Heavy Equipment

In need of new equipment, but not ready to use all your capital to purchase it? 
Leasing is a GREAT solution.  Why you ask?

Not only does leasing help you conserve your cash, it also ensures that you don't wind up paying for equipment that becomes obsolete or unsuited for your needs. And think about this: if you need the equipment only for a short time or special project, leasing saves you the hassle of having to be both a buyer and, then later, a seller. 

Mazuma Capital will work on crafting a lease to help minimize your federal income tax liability, maximize your accounting objectives and customize cash-flow solutions to your budget.  Our Associate Structuring Group has expertise in all these areas and will help guide you to the best structure for your situation.

From technology and medical equipment to renewable energies, leasing is a great option. There's no limit to the type of equipment available for leasing. Even a one-person operation can lease equipment. Unlike loans, leases do not require a down payment. You're required to pay for the use of the equipment during the lease term. You may also be responsible for routine maintenance and other costs as well. When the lease expires, the equipment goes back to the leasing company, you can opt to purchase however you choose to complete your obligation.

Lease payments are considered an expense that you deduct from your business income, just like any other expense.

Flexibility is another leasing feature. If customers or the competition demand that you always have the latest technology, a short-term lease can help you get what you need and keep your cash in other uses. Another plus is that most leasing companies offer lease-to-own plans if you determine that purchasing the equipment is in the best interests of your business.

The Equipment Leasing and Financing Association, a trade group of leasing companies and financial services companies, has a special section that explains the basics of leasing at its website, elfaonline.org. You'll also find guidance on leasing options and benefits, loan/lease differences, leasing terminology.

Mazuma Capital is a national direct lender, financing $100K-$10MM transactions. 
Mazuma Capital offers amazing vendor services and broker programs as well. 
Contact Mazuma at info@mazumacapital.com 801-816-0800.

• Tax oriented leases “true or guideline” leases
• Non-tax oriented leases
• Loan, conditional sales contracts, balloon, and other purchase option structures
• Operating leases
• Lease facilities
• Sale & lease back options
• Step up/step down leases
• Seasonal leases
• Differed payment options
• Bundled lease products
• Non-tax operating leases, and other tax/GAAP products