of the United States Internal Revenue Code, allows companies to write off up to $500,000 worth of qualifying new or used equipment purchased or financed during the 2013 calendar year.
According to the IRS code, “The main benefit of a non-tax capital lease is that you can still take full advantage of the Section 179 Deduction, yet make smaller payments. With a non-tax capital lease you can acquire and write-off up to $500,000 worth of equipment this year, without actually spending $500,000 this year. A small business that is managing cash flow can leverage a non-tax capital lease to minimize out-of-pocket cash and still take the full Section 179 Deduction”.
Typically, depreciation deductions are spread out over time, but Section 179 allows business owners to write off the entire cost of a purchase the year that they buy it. Claiming the Section 179 deduction on your 2013 taxes is easy, although it’s not automatic: you or your tax preparer must fill out IRS Form 4562, the deduction must be taken on an item-by-item basis, and complete records of your business equipment purchasing or leasing must be maintained.
But remember: barring significant action by Congress, the Section 179 deduction will decrease from $500,000 to $25,000 as of January 1st. If you want to deduct up to half a million dollars from your 2013 taxes, you MUST purchase or lease qualifying equipment before December 31st.