is a great solution for all of your business equipment needs, and
on all types of day spa and physical therapy equipment, as well
as tanning systems etc. Whether you are a sole proprietorship, part
of a partnership, leasing equipment is a very intelligent choice.
Leasing provides your company with the quality equipment you require
to successfully operate your business, coupled with the flexibility
of monthly payments. Your business can realize significant tax savings
by leasing equipment, since monthly payments on leases are typically
viewed as operating expenses. Consult with your financial advisor
to determine the most tax-beneficial lease for your company. Is
It Easy to Lease? LeaseProcess is committed to leasing the equipment
you need without the hassle. Our one-page application can get you
approved fast for all of your equipment leasing needs.
Goodspa for an invoice total on your desired equipment, products
and shipping. We will put you in touch with our leasing agency and
you can apply through the link below.
See the Easy Application Sample by clicking here ~
Types of Leases
lease or finance equipment without considering the differences in
expense deduction methods between a true lease or loan. It's only
after year-end when tax time arrives that they find out the type
of lease or financing they chose did not maximize their possible
deductions for that and future years.
of lease residual or purchase option is the primary factor that
determines the tax handling of your lease. Every for-profit company
in the U.S. has an amount of capital equipment they can purchase
each year that can be fully expensed under I.R.S. Section 179. If
your company has not exceeded the annual limit, then a finance lease
with a $1.00 residual may be the choice for you.
On the other
hand, if you have met your maximum capital purchase deduction for
the year or regularly do so, you may want to choose a true lease
with a fair market value residual or purchase option not less than
10% of the original equipment price.
total monthly payments of a true lease are normally expensed each
year, you may be able to accelerate your equipment depreciation
if the lease term is less than the term required to depreciate the
asset under it's classification. You will also save in the accounting
costs associated with creating and managing depreciation schedules.
important factor in choosing your lease is weighing the benefits
versus disadvantages between longer and shorter terms.
can provide for lower monthly payments and increased annual cash
flow for revenue producing assets. The main disadvantage to longer
lease terms is the higher balance you will have to pay off if you
want to trade out of the equipment or buy-out the lease early for
any other reason. If the equipment you are getting does not retain
it's value, depreciates in value quickly, or regularly becomes obsolete,
it may be wise to choose a shorter term.
primary benefits to a fair market value lease, which may or may
not qualify as an operating lease (off balance sheet financing),
are that you may be offered below market rates and you have the
power to negotiate the end of lease purchase price. Best of all,
you can use the equipment at a low rate, just turn it back to the
leasing company at the end, and lease new state of the art equipment
with up-to-date technology.
If you are
acquiring equipment that you are planning to keep for longer than
the lease term and it has high value retention, you may not want
to utilize this type of lease.
This information is provided for your review and should be discussed
with a qualified accountant. We are not a business consulting or
financial accounting firm and shall not be liable for any choices
you make based on the information provided herein.