Looking For A Tax Break? Section 179 May Be The Answer.
No one likes paying taxes, right?
Section 179, a piece of legislation aimed at assisting American businesses, is a great way for small and large business owners to limit their tax liability this year. Today’s short post will explain how Section 179 works for screen printers and how a screen printing shop can take advantage of this helpful deduction!
Section 179 has been in play for a while but has changed a lot over the past three years. Fortunately, last year’s Congress got together through the collective efforts of the NFIB and small businesses to lock in Section 179’s deduction for good (at least for the foreseeable future).
How Section 179 Works
Let’s say, for example, your business grosses 250k in revenue this year as an S-Corp or LLC. You don’t generally pay yourself a big salary because cashflow is constantly fluctuating, so at the end of the year you end up with a bigger net profit – we will say 25k or 10%. Section 179 allows you to invest in equipment or software to run your business and take the entire investment amount off your taxes. So if you buy one of our ROQ 4 YOU Automatic Presses for 30k, that means your business tax liability for 2016 is $0.00! Yep, you pay 0 taxes for the year! The best part is, that you don’t even have to pay for it out of pocket. Loans, Capital Lease, and Ryonet’s Rental Program allow you to write off 100% of the purchase, even if you only pay the minimum down payment to get the equipment installed!
If you were going to pay taxes on that 25k you probably would have paid around 30%, which is $7,500. This means that the $7,500 you would have owed come April 15th, 2017 just went back into your pocket! Coincidently, in most cases $7,500 is more than enough to cover any ROQ automatic upfront + install expense! Increase the efficiency of your shop by 5x AND put cash in your pocket? Thanks Section 179!
The Fine Print
Of course the IRS has some rules for you to follow:
1. Equipment must be paid for upfront, with a finance agreement, or capital lease (operating leases do not qualify). *note that all of our finance options qualify for this discount, check them out here.
2. Equipment must be invoiced and installed in the 2016 calendar year. Don’t wait until December 31st to pull the trigger. In fact, don’t even wait until October 31st – it will be too late. Ya you could try and skimp the paperwork and say you “bought it” in 2016 but if Uncle Sam finds out, there will be fines to pay! “Do it right or pay it twice,” I like to say.
The bottom line: think ahead and use Section 179 to benefit your screen printing shop. Get pre-qualified for a finance option now or talk to us about your equipment expansion needs. For any tax related questions, please speak with your tax advisor for specific details on how this program can help your business.
America, you ROQ!
*This blog post is for informational purposes only. You should not use this as a substitute for your own judgment, and you should consult professional advisors before making any tax, legal, financial planning or investment decisions.
The post Looking For A Tax Break? Section 179 May Be The Answer. appeared first on Ryonet Blog.