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When to lease, not buy, equipment

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in Small Business Tax,Small Business Tax Deduction Strategies

As things stand now, the tax breaks for buying depreciable business property have been watered down for the 2015 tax year.

Strategy: Consider leasing business equipment instead of buying it. Generally, you can write off the entire cost of leasing without a huge upfront commitment.

Also, leasing isn’t forever. If the tax breaks for buying property are revived, you may be able to quickly cash in.

Here’s the whole story: Currently, the maximum Section 179 deduction is only $25,000 for property placed in service in tax years beginning in 2015, down from $500,000 in 2014. In addition, 50% bonus depreciation generally isn’t available for assets placed in service in calendar year 2014.

When you lease equipment, it’s often under a fair market value lease (or a “true lease”). This gives you the option to return the equipment at the end of the lease term with no obligations. You can walk away, or if you want to continue to use the equ...(register to read more)

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