Applying for equipment financing could be the most profitable decision you make for your business and your 2022 tax returns. When you finance equipment, you can get the latest model while enjoying accelerated tax benefits through Section 179.
Learn how tax benefits for equipment financing make it easier to keep more cash in your pocket.
In this article…
- Calculate Your Potential 2022 Tax Savings with Beacon Funding’s FREE app
- How Equipment Financing Helps You Get A Maximum Income Tax Deduction
- Section 179 Deduction Limits for 2022
- Is Section 179 Going Away in 2023?
- Benefits of Equipment Financing
Calculate Your Potential 2022 Tax Savings with the Free Mobile App
Under Section 179, you can expense 100% of the cost of equipment acquired in 2022.* Quickly see your business’s potential Section 179 tax deduction using Beacon Funding's mobile app.
Download the app on AppStore or Google Play.
How Equipment Financing Helps You Get A Maximum Income Tax Deduction
Section 179 is the U.S. government’s way of stimulating the economy by rewarding growing businesses for purchasing equipment.
Here’s how it works: Jobs are created when businesses are encouraged to invest in themselves by adding more working equipment. Then there’s a corresponding increase in wages and payroll taxes from the businesses manufacturing, selling, and using the equipment.
Unlike normal depreciation, Section 179 allows your business to write-off 100% of the purchase price (up to $1,080,000) of the equipment you finance. This simple yet true tax benefit allows 100% of the equipment’s purchase cost to be depreciated in the year acquired against that year’s business profits. The equipment can be either new or used to qualify for Section 179 depreciation.
Watch the video to see how tax breaks for equipment financing can put money back into your pocket.
Section 179 Deduction Limits for 2022
The 2022 Section 179 deduction limit for businesses is $1,080,000 (a $30,000 increase from 2021). Your business can deduct the full price of qualified equipment with a "total equipment purchase" limit of $2.7 million.
If your business finances equipment between January 1st to December 31st and uses it before the end of 2022, you can legally avoid paying federal income taxes on your 2022 profits.
If you purchase equipment over $1,080,000 (and put it into service by December 31st this year), you may qualify for Bonus Depreciation. Bonus depreciation details are complex, so be sure to consult your tax adviser!
Start The Process Sooner Than Later
It’s best to start the process sooner than later especially before the year-end rush.
The sooner you start, the more likely you can use the opportunity to keep cash in your business and avoid equipment not being available when you need it.
Remember: Equipment must be in use before the end of 2022 to qualify. If the equipment you are looking at takes a few months to deliver, plan ahead – that way, you can make sure it is available before the deadline.
Is Section 179 Going Away in 2023?
No, the good news is you can still take advantage of this tax deduction.
There are significant changes to this tax incentive: Check out the latest updates on Section 179's deduction limit for 2023.
Benefits of Equipment Financing
Let’s recap. When you combine fast and easy equipment financing with Section 179 tax savings, your business has an easier way to fit equipment into your budget. These two tools allow you to…
- Maximize your cash flow.
- Keep more cash & lines of credit open for future growth.
- Know exactly what your monthly equipment expenses are.
- Accelerate your income tax benefits.
As the industry leader in equipment financing, Beacon Funding can help you acquire needed equipment for low monthly payments that suit your business needs. If you’re ready to get a heads start, apply for equipment financing today and hear back within 24 hours.
* Talk to your tax advisor to determine the tax ramifications of acquiring equipment or software for your business.