Business Tax Write Offs

Business Tax Write offs

One of the best Business tax write offs that a business can have when acquiring assets or obtaining funding is to finance through a lease.

In most cases, when leasing, the full payment can be written off,  with an example below.
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A customer has secured a $52,000 lease, either for the acquisition of an asset, or through a real estate leaseback.

Tips for business tax write offs

The following cost of financing is with regard to funding for $52,000, for review.

A lease may be written of 100% and  can return approximately $10,234 in Tax savings to you, as follows:

60 payments, $1,319.09 per month plus tax = $79, 145

Tax Write Off:   $79,145 to be written off $100%
$79,145 X .28 (National Average)
= $22,160 in Tax Savings

60 Monthly payments of $1,319.09 per months for $79,145
– $22,160 (You recover Tax Savings) – $52,000 (You recover in funding) =  $4,985 (Total cost not recovered)

Per Year
$4,985 % 5 Years = $997 Per year total cost not recovered

APR – Annual Percentage Rate
$997 / $52,000 = 1.9% Effective APR per year

Cost per month
$997 / 12 = $83/Mo

In business, dollars invested wisely can multiply themselves many times over, and the $83 per month becomes almost insignificant in light of the potential the investment can provide based on even a modest profit margin in the use of funds.

As a result, employing leasing, either via the equipment leaseback or real estate leaseback  method, or to obtain capital, is a cost effective approach for businesses to employ.

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