Equipment Leasing Get Tax Benefits

Equipment leasing is the best option when you really are in need of a particular equipment and do not having enough money, or in situations were you don’t want to spend money from your working capital to purchase the same. Equipment leasing is increasingly popular the world over and almost all companies big or small are offering equipments on lease for their clients to remain in front of the competition without sacrificing their working capital. Moreover, through equipment leasing one can easily reap tax benefits.

The advantage of a lease is that it can provide you with total finance and better terms and conditions than conventional loans. There are many financial advantages and tax benefits of equipment leasing. The main advantage is that equipment leasing helps you to obtain valuable resources at minimum expenditure, which means most of the equipment leases demand only a small deposit as down payment.

To reap the maximum tax benefits, you must have a thorough understanding of the difference between leasing business equipments and purchasing them. IRS rules state that if what you had shown as a lease is a provisional sale or the repayment of an installment, then you are not eligible to enjoy the benefits of tax deductions.

In equipment leasing obtaining tax benefits is of much importance, because a lease payment is usually considered a rental expense and is therefore totally deduced from the total tax amount you’re required to pay. This is also because the lease payments are paid with pre tax dollars. A commercial equipment lease will not be added to your personal credit which will help you a lot to opt for loans for your other needs. Equipment leasing also protects against inflation. The payments are fixed without considering the changes which may occur in the future market, helping you to be more flexible with your budget.

In short, equipment leasing helps you provide instant responses to the requirements of the market your business caters to. The end result is obviously higher earnings.

Zelma Ambrose is a consultant of GSG. Graphic Savings Group specializes in equipment leasing and color copier leasing. GSG offers a full line of leasing options from refinancing to lease buyouts. We offer competitive rates, flexible terms and can even do deals for start-ups and municipalities.

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In : Leasing

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