Since 2008, some level of accelerated depreciation, also called bonus, has been available to equipment owners. These tax breaks are coming to an end on 12/31/13, so qualifying manufacturers need to act soon to write off 50% of the cost to buy eligible equipment for 2013.
Since all equipment is depreciated in some way, whether you purchase, borrow, or lease, you can make that depreciation work for your business, but it depends on your company’s current tax position.
If your business is considered full taxpayer, using a loan or non-tax lease allows it to claim depreciation, including any eligible bonus, directly.
If your business is an Alternative Minimum Taxpayer or has other limited-life tax credits, you might not be able to take full advantage of bonus depreciation directly, whereas a tax lease may allow you to trade in the tax benefit for special lease pricing, with an overall lower financing cost.
Check with your accountant, and get more information about leasing by going to our Business Equipment Leasing page.