IRS Offers Special Tax Breaks to Small Businesses

Section 179 of the United States Internal Revenue Code (26 U.S.C. § 179) allows taxpayers to elect to deduct the cost of certain types of property for tax purposes as an expense, rather than requiring the cost of the property to be capitalized and depreciated. Eligible property is generally limited to tangible, depreciable, personal property (like an Isuzu truck!) which is acquired for use in the active conduct of a trade or business. In addition to standard depreciation on new trucks, bonus depreciation may also be available.

2015 Deduction Limit = $25,000

This deduction is good on new and used equipment, like a new Isuzu truck or a Isuzu GoldStar® previously owned truck. This limit is only good for 2015, and the equipment must be financed / purchased and put into service by the end of the day, 12/31/2015.

2015 Spending Cap on equipment purchases = $200,000

This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced on a dollar for dollar basis. This spending cap makes Section 179 a true “small business tax incentive”.

Bonus Depreciation: not available in 2015

In prior years, Bonus Depreciation would be taken after the Section 179 Spending Cap is reached. Note: Bonus Depreciation was available for new equipment only; in 2015, Bonus Depreciation is not available at all.

2015 Section 179

Example Calculation
2015 or 2016 Isuzu N-Series: $50,000
First Year Write Off: ($25,000 Maximum 2015) $25,000
50% Bonus First Year Depreciation: (not available in 2015) -0-
Normal First Year Depreciation: (20% in each of 5 yrs on remaining amount) $5,000
Total First Year Deduction: ($25,000 + $5,000) $30,000
Cash Savings: ($30,000 x 35% tax rate) $10,500
Equipment cost after tax: (assuming a 35% tax bracket) $39,500

Your Isuzu Transportation Consultant is Here for You!

Not only are the benefits just for making the purchase, but you do not need to pay for the vehicle in cash or pull from your credit line. You have the option of financing or leasing the vehicle at very attractive rates, with little or no money out of your pocket, subject to credit approval. We currently have some low rate finance and lease programs that can be tailored to your particular needs.

It is always suggested to speak to a professional tax accountant regarding any tax matters. Contact us today to discuss your transportation needs and see how our dealership and an Isuzu truck will fit in to your business.

 

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