However, despite the SUV deduction lessened, Section is more beneficial to small businesses than ever. Today, Section is one of the few government incentives available to small businesses, and has been included in many of the recent Stimulus Acts and Congressional Tax Bills. Although large businesses also benefit from Section or Bonus Depreciation, the original target of this legislation was much needed tax relief for small businesses — and millions of small businesses are actually taking action and getting real benefits.
In years past, when your business bought qualifying equipment, it typically wrote it off a little at a time through depreciation. This has made a big difference for many companies and the economy in general. Businesses have used Section to purchase needed equipment right now, instead of waiting.
Talk to your tax advisor to determine how the indicated tax treatment applies to your equipment purchase. Although tax incentives like Section and bonus depreciation can be beneficial, these provisions should only be used in situations that make long-term financial sense for your operation.
Keep in mind not all states conform with federal increases to expensing limitations or the federal treatment of bonus depreciation provisions.
To learn more about financing and leasing equipment with Section , contact your nearest AgDirect territory manager or the AgDirect Finance team at Watch video. See more. Filter by Topic. Develop and improve products. List of Partners vendors. Section of the U. The Section deduction can be taken if the piece of equipment is purchased or financed and the full amount of the purchase price is eligible for the deduction.
Taking the cost of the equipment as an immediate expense deduction allows the business to get an immediate break on their tax burden whereas capitalizing then depreciating the asset allows for smaller deductions to be taken over a longer period of time. The Section expensing method is offered as an incentive for small business owners to grow their businesses with the purchase of new equipment.
Section expense deduction is limited to such items as cars, office equipment, business machinery, and computers. This speedy deduction can provide substantial tax relief for business owners who are purchasing startup equipment. The equipment must qualify for the deduction per the specifications within Section of the tax code and the purchase price must be within the dollar amount ranges allowable by the code.
The property must be placed in service during the tax year for which the deduction is being claimed. Equipment covered by the Section deduction might also qualify for bonus depreciation , which further reduces the business owner's tax bill. Internal Revenue Service. Small Business Taxes. Section offers businesses a wonderful opportunity to leverage purchasing power. Team Financial Group can answer your questions about financing used equipment and help you secure the right kind of financing to qualify for this deduction.
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