Section 179 the IRS code allows 100% depreciation up to $250,000 ($285,000 for qualified enterprise zone property and qualified renewal community property) on all new capital equipment purchased in 2008, after December 31, 2007 and before January 1, 2009.
So if a machine is bought in December – it is treated the same for “tax purposes” as if it was purchased in January and you can take an entire year of depreciation – What a Deal!
The examples below show how a shop can gain significant tax advantages for this year when purchasing MotorVac Equipment: (at a tax rate of 35%)
- Buy a CarbonClean MCS 245 or TransTech MTT 1100 for $3,995.
Save $1,398 in taxes and the effective cost of the machine in then $2,597.
- Buy a CoolantClean MCF 5100 for $2,795.
Save $978 in taxes and the effective cost of the machine is then $1,817.
- Buy an OilClean MOF 1000 for $1,995.
Save $698 in taxes and the effective cost of the machine is then $1,297.
These calculations are based on average assumptions regarding a business that is profitable, in a 35% tax bracket and has no extraordinary deductions. As always, consult with your accountant or financial adviser before making any decisions on tax related matters that will impact your financial position.
Now is an excellent time to buy equipment— a shop can can capture savings for the entire year on an investment made at the end of the year as long as the equipment is delivered before December 31, 2008.
Most importantly, the machine will add a new PM service to the shop menu, increase sales, enhance profits and help grow the shop business next year.
Management tip courtesy of MotorVac Technologies, Inc.
For additional information on MotorVac Technologies, Inc., visit www.motorvac.com.