The objective of the Section 179 tax deduction is to incentivize companies to buy equipment to help their business and ensure that small businesses can be successful. Informing customers of the benefits during your sales conversation can become a great tool for you to incentivize your customers to make a purchase now.

In the wake of the COVID-19 pandemic shutdown, the world of business in the immediate future is destined to be very different from what was once normal.

The basics: What is Section 179?

For starters, the name is in reference to Section 179 of the IRS tax code. It allows small to medium-sized businesses to deduct up to $1,160,000 worth of qualifying equipment or software from their net income if it was purchased or financed within that year (January 1 to December 31st). The goal of deducting the total depreciation expense of the equipment within the current year is to reduce a company’s taxable income and leave incentives for more purchasing in the future by optimizing cash flow. For a more in-depth explanation, read here.

Site Safety and Social Distancing 

No matter what the business, from mom and pop retail to large-scale manufacturing, the workplace of the future is likely to be more safety-oriented than in the past. Whether that means an installation of Plexiglass screening at every cash register, additional partitioning between desks, remote work stations and teleconferencing, shorter operating hours, or PPE and disinfectant wipes for every customer, business owners should assess future needs in relation to current capabilities. If that means leasing or purchasing new equipment to return to business, the increased costs will become a new requirement for doing business in this new age.

Ask your customer if they plan on using it

If your customer says no, it’s likely they don’t have knowledge of Section 179. You can use the conversation starter to briefly explain how the full cost of the equipment they’re interested in can be written off and they should speak with their accountant to see how this equipment purchase can help them save on taxes

If the customer says yes, then you know that this is something of importance to them. Ask if they are speaking to their accountant before the end of the year to see if any additional equipment purchases would be of help to reduce their taxes.

Risk Assessment 

Related to site safety, of course, is the risk of opening for business. Reopening guidance is supplied by federal, state, and local officials, but it’s the owner’s duty to weigh the risk to both employees and customers against the options of reopening on a limited scale or remaining closed. There may be no easy answers. What is vital is having a plan, even if it’s not attached to a firm timeline as yet. Drafting contingency plans is also highly recommended, in the event that spread of the infection continues or recurs.

You don’t have to know everything

You’re not expected to know every detail about the tax code for the customer’s sake, so don’t let that stop you from bringing up the topic. Tell them the important information and encourage them to look into how it could help them make the purchase more feasible for their business. Regardless, reducing their overall taxes is a nice perk that business owners should be eager to take advantage of.

It’s been a hard year for your customers and it’s okay to remind them of it. They may really need new equipment to help them out. Reducing their taxes frees up cash for them to use on their business and the money they would make off the machine is sure to help as well. Financing the machine is another way your customers can conserve cash and referring them to a fast and simple lender like American Capital Group who ensures they get the Lowest Payment Guarantee* while utilizing Section 179 tax deduction benefits.

American Capital Group can find a program to meet any funding need. Your customers can get a Free Quote or apply for an approval with no hard inquiry. If they’re just curious, use our Payment Calculator to ballpark what a payment for them would look like.

Official Guidance

There is little doubt that legislative and regulatory oversight will continue, at least for the immediate future. Some forecasts do not point to relaxed restrictions until an effective vaccine is available, and that may not happen for another year or more. Compliance with official guidelines will be required; there simply are no options.

If you have a current customer who needs funding, have them apply, or reach out to our team for a quick quote or consultation.

Keep a Watch on Funds

Uncertain times require not only a better analysis but greater concern with finances. This is an area where having American Capital Group “in your corner” can be a great advantage. Our ability to work with both large and small companies to finance needed new or used equipment can be a perfect solution. We offer low-risk options to help your business survive and thrive in these difficult times. We have been a resource for American business for the past 25 years.

It’s important to consider these 5 vital areas as you make your plan for reopening your business. Contact ACG to discuss your individual needs. If you have a current customer who needs funding, have them apply, or reach out to our team for a quick quote or consultation.