Thinking of Buying a New Van? The Time Is Now!
Have you heard about the Section 179 deduction for vehicle purchases? Created as a part of the Tax Cuts and Jobs Act of 2017, this special deduction encourages businesses to buy equipment and invest in themselves. Section 179 allows businesses to deduct the full purchase price of a new or “new to you” vehicle if purchased or financed during the current tax year. That means that if you buy or lease a Sprinter Van, you can deduct the full purchase price from your gross income on your 2020 tax return.
With an incentive like that, now is the perfect time to take advantage of these savings and purchase a Sprinter Van!
Taking advantage of this incentive is easier than you might think. Section 179 of the IRS tax code allows your business to deduct the full purchase price of a vehicle (valued under $2.5 million) if it is purchased or financed in 2020. This helps your business and your bottom line by accelerating the vehicle’s depreciation value, enabling you to claim the cost of purchase during the first year of ownership. The result is larger tax savings, allowing you to reinvest those monies back into your business.
But, there are limits and conditions when purchasing a vehicle under the Section 179 deduction. The vehicle must be purchased and put into circulation in 2020 if you plan to claim the deduction this calendar year. The vehicle must also be used for commercial purposes at least 50% of the time, and the tax deduction is limited to that percentage. For example, if your vehicle’s purchase price is $80,000 and it’s used for business purposes 75% of the time, the maximum deduction is $60,000.
To make the most of your purchasing power and take advantage of cost savings, consider buying a “new to you” vehicle instead of the newest model. Negotiating your purchase price and financing terms is another way to save money. If you’re like a majority of business owners, chances are at least part of your vehicle purchase will be leased or financed. When you combine a properly structured lease or finance agreement with a full Section 179 deduction, the taxes you save will likely exceed your expenses - making it one of the most profitable decisions you can make for your business.
By taking advantage of Section 179 incentives and doing some old-fashioned research, your business can reap the financial benefits in 2020 and beyond.
Southport Truck Group is an authorized Freightliner Sprinter dealership in Southwest Florida. If you’re in the market for a new or used vehicle at a great price, our experienced sales and financing staff are here to find the perfect Sprinter Van for your business needs! Call us today at 813-262-0890 (Tampa) / 239-210-9450 (Fort Myers) or stop by our showroom.
Sources
https://www.freightlinersprinterusa.com/en/section-179-tax-deductions
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