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How to Maximize Tax Savings on New Equipment

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Did you know that you could maximize tax savings on new forklifts, thanks to the Protecting Americans from Tax Hikes (PATH) Act of 2015? This law adds some stability and certainty to tax planning by protecting and extending several tax benefits.

Section 179

One of the provisions made permanent by the PATH Act is the enhanced Section 179 expensing. It is now set at $510,000 in 2017 for qualifying equipment, including forklifts and aerial lifts. If your business has over $2,030,000 in purchases in 2017, your expense deduction is subject to a dollar-for-dollar phase out for up to $2,540,000. In addition, the law indexes for inflation in $10,000 increments for future years.

Bonus Depreciation

Bonus depreciation allows your business to recover the costs of depreciable assets quickly by claiming additional first-year depreciation deduction for qualified assets. The PATH Act of 2015 extends and modifies the rules of bonus depreciation. For equipment placed in service in 2017, 2018 and 2019, the bonus depreciation percentage is 50%, 40% and 30% respectively.

Qualified assets include new equipment with a recovery period of 20 years or less.

A Quick Primer on the PATH Act

Congress passed the PATH Act on December 18, 2015 as a wide-ranging law that extends expired tax provisions for two years or five years, while making many popular tax breaks permanent.

A major benefit of this law is that you no longer have to wait for Congress to pass a temporary (sometimes last minute) tax extenders law in order to plan your tax-saving strategy. With this law, you can count on quickly depreciating and expensing property, including qualifying material handling equipment.

Due to long lead times for new forklifts toward the end of the year, you must act fast to take advantage of the tax savings of this law before the year runs out.

Take advantage of current tax laws by purchasing your next forklift or aerial lift in 2017. Contact us at 713-365-2565 for your new forklifts or aerial lifts today.

Disclaimer: Equipment Depot or its employees do not provide tax, legal or accounting advice. This material is for informational purposes only, and is not intended to provide and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. Equipment Depot does not guarantee that the information contained herein is correct, complete or up-to-date and assumes no liability for the use or interpretation of such information.

 

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