Year end means scrambling for all possible tax deductions for the smart small business owner, and it's time to let your imagination wander on how to spend the extra cash that could be coming your way.
Section 179 tax incentives can help -- especially if you're in the manufacturing business.
The deadline for these incentives is December 31, 2016, so if section 179 leases are available to your company, it's time to get moving! Here's how to take advantage of this tax benefit.
Section 179 Leases
Now on to the best part.
Section 179 allows businesses to deduct the full purchase price of a piece of qualifying equipment that is purchased or leased during the tax year.
But even if you're not looking to purchase, leasing is an option under the provision:
"Did you know that your company can lease equipment and still take full advantage of the Section 179 deduction? In fact, leasing equipment and/or software with the Section 179 deduction is a preferred financial strategy for many businesses, as it can significantly help with not only cash flow, but with profits as well." (Section179.org)
And those leases can include heavy metal manufacturing equipment.*
How to Take Advantage of Section 179 in Heavy Metal Manufacturing
Here's a rundown of some key Section 179 provisions for farmers and small business owners. Seen it before? It might have changed since last year, so please take a moment to review it.
- To qualify for Section 179, equipment must be used at least 50% for business.
- For 2016, the amount that can be written off caps at $500,000.
- Total amount purchased is limited to $2,000,000. The deduction begins to phase out dollar-for-dollar after $2,000,000 is spent by a given business, making it a true small and medium-sized business deduction.
- Qualifying heavy metal manufacturing equipment for Section 179 can be either purchased or leased.
- You can't claim Section 179 on a machine you purchased for personal use in a previous year, even if you change its purpose to business later.
Have more questions about what qualifies? Read all about property that qualifies for section 179 leases and purchases.
Ready to Take Advantage of Tax Deductions on Machines for Your Business?
Remember: You need to take advantage of section 179 leases before the year ends.
At Scotchman, we're proud to offer leasing options to the heavy metal manufacturing community. Sometimes, that route just makes more sense for your company's financing.
Check out our line of American-made products, and let us know what we can do to help make 2016 a triumphant year for your business. If you have any tax questions, consult your financial expert. For questions about our inventory, our knowledgeable customer service staff is ready to clear things up.