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| Depreciation benefits are
back with a bang! |
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| The Tax Relief, Unemployment Insurance Reauthorization,
and Job Creation Act of 2010 provides businesses with additional tax benefits through
December 31, 2011 | |
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Tax Updates
- Under Section 179, businesses spending less than
$2,000,000 a year on qualified equipment may
Write off up to $500,000 in 2011.
- The $500,000 deduction phases out when a
business purchases more than $2,000,000
in one year.
- 100% Bonus Depreciation on qualified equipment
Acquired and placed in service after September 8,
2010 through December 31, 2011.
- Companies cannot write off more than their
taxable income.
- Your new equipment must be placed in service
by December 31, 2011.
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| Cost of Equipment |
$600,000 |
1st Year write-offs
- Section 179
- 100% Bonus Depreciation1
|
$500,000
$100,000 |
| Total Deduction in 1st Year |
$600,000 |
| Marginal tax rate assumed 35%2 |
$210,000 |
| Bottom line equipment cost after tax savings |
$390,000 |
In this example your tax savings equates to an increased cash flow in the amount of $210,000.
1 100% bonus depreciation after Section 179 deduction.
2 Tax savings are assuming 35% tax bracket.
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| What does this mean for Businesses? |
- Our capital leases help businesses take advantage of
the tax benefits (above) by extending payments out as
long as 5 years.
- Tax Savings could be greater than the amount paid in
the first year of a capital lease.
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International Financial Services is celebrating its 30th Anniversary. Unlike many banks, IFS rarely requires large down payments, or restrictions on financial statement ratios;
no compensating balances are required; nor do we routinely place restrictions on capital expenditures, additional borrowings, or officers’ compensation. A primary benefit of
financing or leasing equipment through IFS is the preservation of precious liquidity, scarce lines of credit and bank borrowing capacity. We hope to have the opportunity
to show you why 43% of our business in 2010 was generated by satisfied repeat customers.
International Financial Services Corporation * www.ifsc.com
Corp HQ: 800-258-3531, 1113 S. Milwaukee Ave., Ste. 301, Libertyville, IL 60048
IFS is not offering legal, tax, accounting or financial advice. Customers are encouraged to consult with their tax and accounting advisors for a clear understanding of how these tax benefits and/or various equipment financing products could impact their specific business conditions. For complete details or changes to the tax incentives, please visit www.irs.gov or contact the IRS helpline at 800-829-4933.
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