Its not too late for businesses to take advantage of tax breaks on equipment purchases set to expire at the end of the year.
The Section 179 deduction applies to most types of equipment costing up to $2 million. In some cases, the deductions and bonus depreciation can translate to tax savings of more than $200,000.
Todd Cooper, Wells Fargo regional business banking manager for Idaho, says Section 179 has stimulated equipment investment over the last two years, especially among midsize and large businesses.
Its spurred equipment investment, but theres also a section of business owners who havent had a conversation with their tax advisers or business bankers about it, Cooper says. Its worth having that conversation.
Stinker Stores owner Charley Jones says Stinker buys new fuel dispensers, fuel trucks and equipment for its chain of gas stations every year, often approaching Section 179s $2 million maximum threshold. Jones says he made sure to surpass the threshold this year to maximize the Section 179 deduction.
It would be silly to put off any expenditure of equipment you need, Jones says. If I roll forward and buy more equipment in 2013 than I normally would, and then I can go light in 2014, thats to my benefit.
Justin Woodward, an equipment finance account executive for Zions Bank, says the deduction qualifications get kind of convoluted and must be considered case by base. The one absolute is that businesses must be profitable to claim the deductions.
Ive seen a lot of equipment loans in transportation, because businesses are always moving trucks and trailers out of the fleet, Woodward says. But we also see it in machine-tool shops, and possibly the construction guy who has done well and needs to upgrade a dump truck or backhoe. Even a mom-and-pop situation could take advantage.
Zach Kyle: 377-6464, @IDS_zachkyle