Take advantage of the Section 179 Deduction: Get the equipment you need and tax savings, too

By Mitch Allen

While many industry sectors have suffered during the 2020 Covid-19 pandemic, most local contractors have had a banner year. That’s because many homeowners are shifting their vacation savings to home improvement projects instead, a trend that will continue into 2021 and beyond.

Of course, the reward contractors will reap for all of their hard work and improved profits will be a big tax bill come April 15, 2021.

But right now two local business owners are helping local contractors find the heavy equipment they need—and slash their tax liabilities.

*Section 179
Alan Zatik and Jamie Terpay are the co-owners of ABC Equipment Rental & Sales, which sells and rents almost anything a professional contractor needs, including man-lifts, dozers, backhoes, forklifts and skid steers. And right now they’re helping business owners take advantage of *Section 179 of the United States Internal Revenue Code, which allows you to write off equipment purchases up to $1.04 million in 2020 instead of depreciating the expense over time. This means huge tax savings immediately on equipment you need right now.

“For example,” Alan says, “if you purchase a rough terrain forklift for $50,000 before December 31, 2020, you can deduct the full purchase price on your company’s 2020 taxes. If you had profit of, say, $100,000, you just cut your tax bill in half. The more equipment you purchase, the greater your 2020 tax savings.”

The Section 179 deduction also includes certain used equipment, including much of Alan’s well-maintained equipment coming out of rental service.

The equipment your business needs may or may not qualify, so please consult your tax adviser before relying on any purchase to qualify.

If you’re not quite ready to buy, you can rent equipment, too—including skid steers for winter snow plowing—and apply a large portion of your rental payments to an eventual purchase.

Get Caught Up
This year’s boom in the home improvement sector has meant that many contractors are booked with jobs through next spring and well into the summer. They just can’t get the work done fast enough. That, says Alan, is where efficiencies related to proper equipment can pay big dividends.

“You don’t want people dilly-dallying on the jobsite with shovels, ladders, scaffolding and under-sized moving equipment. You want to get in and get out fast and safely. That’s where things like forklifts, skid steers and manlifts come in. With two 60-foot manlifts you can work both sides of the job, and a forklift will get material where it needs to be when it needs to be there. No one is standing around waiting for material.”

Alan says that manlifts are ABC’s number one rental item, growing tremendously in the past 20 years. “It’s because of safety and efficiency,” he says. “You can do five times the work compared to ladders or scaffolding. Manlifts, mobile platforms and booms are the top assets on the jobsite, especially with today’s labor shortage.”

Top-of-the-Line Equipment
ABC sells and/or rents top-quality brands, like Kubota, Genie, JLG, Skyjack, Wacker, Solar-Tech, Towmaster, Stihl, Honda, Mustang, Gehl, and more. With over 60 years of combined experience, Alan and Jamie know which brands work—and which don’t. They are especially proud to be a Kubota dealer, offering construction equipment like skid steers, excavators, wheel loaders, RTVs and rubber track loaders.

“We only offer heavy-duty equipment,” Alan says. “We don’t carry brands that are less than commercial quality. So even if you’re a homeowner, you know you’re getting commercial quality.”

Speaking of quality, unlike John Deere and Bobcat, Kubota offers a standard two-year warranty and makes the best-selling diesel engine in the world.

Big Discounts/Easy Financing
Today you can earn big cash discounts up to *$11,000, or ABC can work with local banks or manufacturers to help you get low-interest financing. In fact, right you can get *0% interest on all Kubota construction equipment for up to 60 months, depending on the equipment you choose.

ABC Equipment Rental & Sales has two locations: 29 Pearl Road in Brunswick (corner of Boston & Pearl), 330-220-4545; and at 38525 Chester Road in Avon (corner of Route 90 & Route 611), 440-934-7368. For more information visit ABCEquipment.com.

*Kubota Tractor Corporation, 2020. Limitations under Section 179 may apply. See a qualified tax professional for advice on your specific situation. Customer instant rebates of $11,000 are available on purchases of new Kubota KX080 Series equipment from participating dealers’ in-stock inventory. 0% A.P.R. financing for up to 60 months on purchases of select new Kubota K008, KX, U, R, SCL, SVL, SSV, TLB Series equipment from participating dealers’ in-stock inventory is available to qualified purchasers through Kubota Credit Corporation, U.S.A.; subject to credit approval. Example: 60 monthly payments of $16.67 per $1,000 financed. $11,000 rebate is not available with 0% A.P.R. or other promotional financing. Some exceptions apply. Offers expire 12/31/20. Terms subject to change. This material is for descriptive purposes only. Kubota disclaims all representations and warranties, express or implied, or any liability from the use of this material. For complete warranty, disclaimer, safety, incentive offer and product information, consult your local Dealer or go to KubotaUSA.com.