Businesses want to REDUCE  INCOME  TAXES

• To reduce taxes businesses either reduce revenues or increase expenses
• It is unlikely that businesses want to reduce revenues… So increasing expenses is the logical option
• BUT, how does a business increase expenses but not use any of their cash? 
• Depreciation is how….Tax Code 179 is just using depreciation more effectively
• Tax Code 179 allows a business to fully depreciate (i.e. expense) the cost of the equipment/software in the year they purchase it
• Depreciation is the expense a business takes for purchasing and using equipment/software
• Depreciation is one of those rare expenses that DOES NOT require a business to use money from their bank account

• Normal expenses like payroll, insurance and rent are paid with actual cash out of the business’ bank account

Tax Code 179 REDUCES the effective COST of the Equipment/Software (an example)

• Equipment/Software Quote =             $25,000
• Practice’s Estimated Tax Rate=             21%          
• $25,000 * 21% = $5,250 in 2018 income tax savings
• Therefore, a $25,000 piece of equipment less the tax savings of $5,250 equals net project cost of $19,750.  You have just shown the practice how to save $$.

Owners can EARN MORE CASH in 2019

• Your customer purchases from you in 2019

• Your customer finances the equipment/software through GSG
• GSG requires NO $$ down and defers the start of the business’ payments until 2019
• Taking the Tax Code 179 Tax Deduction Now with No Money out of pocket for the purchase of the equipment/software in 2019 means….
• Owners can take the extra $5,250 in cash (tax savings from example above) out of the business in form of extra bonuses or pay.  They make more MONEY.

Use It or Lose It

• Tax Code 179 is available to businesses every year, however, it does not rollover
• 2019 Tax Code 179 Limit:  $1,000,000
• 2020 Tax Code 179 Limit:  $1,000,000