December is a smart time for businesses to finance commercial vehicles and equipment. Here’s why. Major tax incentives lower the costs significantly. Qualifying capital equipment must be financed and put into service by Dec. 31 for maximum tax savings under IRS Section 179. Capital leases count, too.
Our new infographic gives two examples of potential tax savings: $700,000 of qualifying capital equipment costs $481,600 after the savings, and $75,000 of equipment costs just $48,750. You can see why this is the perfect season for adding trucks, limousines, buses and other commercial vehicles to your fleet.
IRS Section 179 deduction limits for 2017 are set at $510,000, with 50% bonus depreciation applying on the remaining balance up to $2,030,000. Section 179 of the IRS tax code allows small businesses and freelance professionals to immediately expense up to 100% of newly acquired equipment in the year it was placed in service, helping to reduce tax liability for the tax year in question. Deductions for 2017 are up from 2016, which saw limits at $500,000/$2,010,000. Section 179 was positively affected by the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), which permanently set the Section 179 deduction limit at $500,000, with $10,000 adjustments for inflation each year starting in 2017.
Contact Advantage Funding for fast, friendly commercial vehicle financing. We also finance other types of equipment.