Is Renting a Laser Device the Right Option?
Renting your laser equipment may sound like a great option, but is it really the best option for your own business? You need to at least consider the other options - leasing or purchasing - before turning to rentals.
Your Business Needs Versus Your Budget
Your reserves have to be the guiding factor in making business decisions. No matter how big or small the cost, you need to know how much of your funds are available. Look at any expected expenses both right now and in the future, then think about the unexpected costs that can occur. If you have plenty of cash available, you might reconsider a long-term investment.
Taxes Can Affect Long-Term Choices
Renting is a short-term choice that keeps the costs down on a monthly scale. It seems a viable option if you have a small budget. However, you might want to look at things down the road, especially at tax time. Purchasing or leasing a machine is considered a deductible expense and may reduce the amount of income reported on your return.
The Strain of a Loan
When you have a tight budget, taking a loan sounds like a good way to open up your funds. That is often not the case. The loan process itself is difficult at best and usually results in tying up your credit until it is paid off. In the meantime, you may not be able to take out another loan when you need it most.
Leasing Won't Tie Up Your Funds
Purchasing a new cosmetic laser device will quickly deplete your funds and leave you little to nothing for any emergencies that may come up. No matter how hard you plan, you can't anticipate every major expense down the road. Leasing leaves most of your funds free for such events.
Deducting Business Expenses
Business expenses play a big role when it comes to your tax returns. Section 179 of the tax codes varies from year to year. This code is of particular importance when it comes to purchasing or leasing your laser equipment.
What is so special about tax code 179? This code determines how much you can deduct in business expenses in a given year, as much as $500,000. That's a major benefit to your business when it comes to your tax returns. Speak to your tax accountant about the tax code and the laser equipment to determine if this is the best time to purchase, lease, or rent your equipment.