Doing taxes can be a pain for many people. Not only does it take a lot of time and effort to do, sometimes you also have to pay for things you are not aware of. Here in the U.S., when a person purchases equipment for business, it can be deductible from his taxes. This is according to section 179 of the IRS rules and regulations.
However, that is not always the case. There is a maximum amount of tax deduction only applicable for businesses and equipment purchased. This can be disappointing for many business owners. Save yourself and your business from this trouble. Rent equipment instead of buying them! There are many tax benefits of renting equipment rather than buying them. We list some benefits below.
Less Tax Forms to Complete
The first advantage of having to rent equipment instead of buying is having less tax forms to complete. Since you did not purchase the equipment, you will not be mandated to pay the tax for purchasing nor will you be liable for the rate of depreciation. You may just write the rental as project expenses.
The Section 179 of the IRS notes that the government allows businesses to write off until $500,000 of equipment. Having released a large capital to purchase equipment may mean paying for higher taxes. However, if you opt to rent equipment instead of buying, you could be charged with a lesser amount and have less taxes to pay. Rental expenses are often categorized as deductible expenses rather than taxes.
It is not easy to bring out capital to purchase equipment. As many do not see it, equipment purchases also make you pay for other services. These include repairs, storage, and transportation. Although not included in section 179, if you think about it, repairs, storage, and transportation of equipment often appear on project expenses. These additional expenses may not exactly be deducted from your tax depending on how the IRS sees it.
Flexibility on kinds of equipment
The IRS has a list of equipment that can only be applied for section 179. In some circumstances, some equipment you purchase may not be considered for tax deduction. Aside from that, there is only a certain range of prices that the IRS considers acceptable for tax deduction.
Take Advantage of the Benefits of Equipment Rental Now
Renting equipment saves you from all of these. It gives you the flexibility in choosing what equipment you want for your project. There would be no need to choose a lower quality of equipment just so you can have tax deductions. Doing taxes is not an easy thing. When you are a business owner it would be easier for you to rent out equipment rather than purchasing it. Aside from lower costs, it also has multiple benefits for you and your company.
Need more information about the benefits of equipment rental over equipment purchase? A reliable equipment rental company is ready to help!
Written by Lindsey Rentals. Lindsey Rentals offers the best equipment rentals in Columbia, MO.