Latest news with #Section179
Yahoo
30-05-2025
- Business
- Yahoo
Pros and cons of semi-truck financing
Semi-truck financing can be easier to secure than other business loans, even if you are a new business or have bad credit Businesses can take advantage of depreciation and the Section 179 deduction to save money on taxes when buying equipment Online lenders and direct lenders specializing in the trucking industry can provide fast funding and flexible payment options. Financing a semi truck can help ease the startup costs as an owner-operator. And the good news is that semi-truck financing can be easier to secure than other business loans if you're a new business or have bad credit. Online lenders and direct lenders often relax eligibility requirements, making the loan more accessible to drivers. While semi-truck financing is easier to secure, there are still additional costs associated with it, like a down payment and loan fees. Additionally, your truck will be used as collateral to secure the loan. Before signing the paperwork, you'll want to review the pros and cons of a semi-truck loan to ensure it's the right choice for your business. Pros of semi-truck loans Cons of semi-truck loans Fast funding High purchase costs Tax benefits High interest and loan fees Spread out the cost of a large purchase Requires a down payment Accessible to startups and bad credit borrowers May use the semi truck as collateral to back the loan Not only does financing your semi truck lower your upfront costs, but it also provides many other advantages to get your business off the ground. Semi-truck financing is a straightforward type of loan. You can easily show the lender what you're using the loan for and the contracts you have to provide income for payments. You'll also use the truck as collateral, giving the lender a secure reason to approve the loan. Semi-truck loans can get approved in as little as a few days, helping you get on the road faster than other types of loans. Be aware that it may take up to a week if you're financing through a traditional bank lender. The exact time to get funding depends on the lender, the type of loan and the characteristics of your truck. You can deduct ordinary and necessary expenses for your semi truck come tax time if you're a self-employed driver. You won't be able to use the standard mileage deduction for business vehicles, though, so you'll need to calculate your exact vehicle expenses. The vehicle expenses that you can claim as a deduction includes any purchase that you make for your truck. Those purchases include insurance, fuel, repair work, parts, licenses and other fees. If you're employed by a trucking company, your company will pay for these vehicle expenses. However, employees can still deduct travel expenses when away from home, such as lodging, meals and laundry costs. To deduct travel expenses, you have to meet both requirements: Be traveling away from home for a period that's longer than a normal workday Must stop and sleep to keep up with work demands No matter what expenses you're claiming, keep tidy receipts and records to back up what you claim on your taxes. When you finance a semi truck, you can deduct your annual interest payments on your taxes. You can make this deduction each year for the entire life of the loan. The IRS also considers your financed vehicle a business asset, which means that you can claim depreciation even though you don't fully own the truck. When you claim depreciation for commercial equipment, you typically depreciate part of the equipment's value over its usable life. However, Section 179 allows you to deduct part or all of your equipment's cost during the first year that you place it in service. This deduction encourages small businesses to invest in commercial equipment that will grow their businesses. You don't have to take the full Section 179 deduction. If you don't, you can depreciate the rest of your semi truck's value on your taxes over the life of the truck. Beginning in 2024, businesses can claim a maximum deduction of $1,220,000, according to the IRS. If the total value of your property goes over $3,050,000, you have to reduce the tax deduction by the excess amount. For example, if you buy a fleet of trucks worth $3,100,000, you exceed the $3,050,000 limit by $50,000. Your total tax deduction for depreciation would be $1,220,000 – $50,000 = $1,170,000 (or $1.17 million). So unless you buy a fleet of semi trucks, you can deduct the full cost of your owned or financed truck on your taxes. Bankrate tip You can only deduct depreciation up to your business's taxable income for the year. But you can carry over any remaining Section 179 deductions for upcoming tax years. Semi trucks are an integral part of your work as a trucker, but shouldering the entire cost at once may not be feasible or may strain your finances. Instead of paying $70,000 to $200,000 to buy a truck outright, a semi-truck loan can help you spread out the cost of the purchase. Most semi-truck loans offers terms between one and five years. Spreading out the semi-truck purchase makes the cost more manageable for your business, and you can pay for the truck as you generate income with it. In other words, let the semi truck pay for itself. Leasing your semi truck is a good idea if you don't qualify for a loan or you don't want to chance defaulting on a loan if your contracts go sideways. Some leasing companies don't require a down payment and most offer vehicle maintenance packages, helping you get on the road for a predictable monthly payment. You could also get matched with a much newer truck than you could afford with a loan. Plus, you can opt to buy your truck at the end of your lease. But you might pay more in fees by the end than you would if you financed a truck. You'll typically finance a semi truck through an equipment loan, which is a secured loan. Secured loans are less risky to the lender because they can recoup the loan by seizing the asset you used as collateral. Because you can use your high-value semi truck to secure the loan, you could get semi-truck financing as a startup business or with poor credit. Lenders tend to offer leniency when approving secured loans. The main downside to semi-truck financing is the variety of costs that you'll bear over the life of the loan. Take a look at what costs you'll be expected to pay. Even though you're paying for it over time, a semi truck is going to cost you tens of thousands of dollars no matter what type of financing you choose. For example, if you need a business loan for $100,000 to finance a semi truck for seven years at 6 percent interest, you're looking to pay an additional $22,712 in interest above the cost of the vehicle. Before signing for a semi-truck loan, use a business loan calculator to get an idea of your monthly repayments and total interest. Knowing these costs upfront can help you manage a semi-truck loan so that you can successfully repay the loan. Most lenders offer their prime interest rates as low as 6 percent if you have a credit score in the upper 600s or higher. But if you have bad credit or you're a first-time owner-operator, you might see interest rates between 30 and 100 percent. Let's put that interest in perspective. If you finance a $100,000 semi truck for seven years at 10 percent interest, you'll end up paying $39,450 in interest over the life of the loan. But compare that with a 30 percent interest rate in which you'll pay a hefty $140,181 in interest over the course of the loan. This calculation shows why it's important to find the lowest interest rate possible for your business. Additionally, you have the regular business loan fees to watch for. Depending on the lender, you may pay an origination fee of anywhere from two percent to five percent of the loan amount. You may also pay fees to apply for the loan and get the truck appraised. You'll most likely need to put 10 to 20 percent down when getting a loan for your semi truck. The down payment lowers the risk of financing for the lender, helping you get approved if you have subprime credit. But it means you need a hefty sum on hand before you can get your truck. Some lenders will offer financing with no down payments, such as U.S. Bank, but you will have to do your research as these lenders are few and far between. Semi-truck financing typically uses the semi truck as collateral to back the loan. While the secured loan can lead to lower rates, it also means that the lender can seize the truck to repay the loan if you default on payments. To avoid getting your semi truck taken away right after missing payments, you could opt for an unsecured term loan. You will need strong credit and finances to secure this type of loan. Weighing semi-truck financing pros and cons can help you avoid a potentially expensive mistake. Semi-truck financing is right for businesses that need to purchase a semi truck but don't have the available capital to make the purchase in cash. It also works well for businesses that want to keep capital on hand to manage cash flow. Financing a semi truck may also be a wise decision if you're eligible for a good interest rate and plan on keeping the vehicle for the long run. But, if the cost of semi-truck financing doesn't fit in your budget or you don't have the money upfront for the down payment and fees, you may need to go with an alternative option. Financing a semi truck helps you cover the cost of an expensive asset without depleting your financial resources before you even get on the road. Yet any business loan will set you back in interest and fees versus buying the truck outright. This is especially true if you have poor credit and aren't eligible for the lowest rates. Your best bet is to shop around with different lenders to see what types of loans and interest rates you qualify for. If you're in good financial standing, try a traditional bank for the lowest rates. Otherwise, you might want to work with an online or direct lender that specializes in the trucking industry. These lenders tend to offer lenient eligibility requirements, helping you get approved. How long can you finance a semi truck?Most lenders will finance a semi truck for up to five years. Some lenders offer terms as long as seven years, while a few will customize the repayment terms based on your financial situation. What credit score do you need to buy a semi truck?If you finance your semi truck through a traditional bank, you'll need a credit score of 670 or higher. Online lenders typically set their minimum credit scores in the low 600s. If you have poor credit, you can find online lenders that offer loans for bad credit borrowers. You may also be able to get approved with bad credit by offering a higher down payment or extra collateral to back the loan. Where can I get semi-truck financing with no down payment?You're most likely to get semi-truck financing without a down payment if you go with a leasing company like National Funding or Ryder. Most leases give you the option to buy the truck at the end, so ownership is still possible. If you want to finance without a down payment, you'll need to find a lender willing to work with you like U.S. Bank. They may also require excellent credit and strong finances to repay the loan, and expect to pay a higher interest rate than you would if you put money down.
Time Business News
27-05-2025
- Business
- Time Business News
How to Choose the Right Construction Equipment Finance Options for Your Business
When it comes to growing a successful construction business, having access to the right equipment can make or break your operations. However, buying heavy machinery outright isn't always practical—or financially viable. That's where smart Construction Equipment Finance Options come into play. Choosing the right financing solution not only helps you manage cash flow but also ensures your business remains competitive and agile. Construction equipment is a major investment. Excavators, bulldozers, cranes, and loaders can cost tens or even hundreds of thousands of dollars. Paying upfront can strain capital reserves that might be better allocated to payroll, marketing, or expansion efforts. By exploring financing options, businesses can: Preserve Working Capital Avoid Equipment Obsolescence Build Business Credit Access More Equipment, Sooner Choosing the right option depends on your business model, cash flow, and long-term goals. Here are some of the most popular and effective methods: You borrow money specifically to purchase machinery, using the equipment as collateral. This is ideal for companies that plan to use the machinery long-term. Leasing provides flexibility with lower upfront costs. There are two main types: Operating Lease – Best if you plan to upgrade equipment regularly. – Best if you plan to upgrade equipment regularly. Capital Lease – Functions more like a loan and ends with ownership. While not technically a finance option, renting is useful for short-term needs or specialized equipment. Own the equipment already? Sell it to a finance company and lease it back. This frees up cash while retaining use of the machinery. The Small Business Administration offers loan programs that can help finance construction equipment with favorable terms. To choose the right path, consider: Project Duration : Will the equipment be used long-term or short-term? : Will the equipment be used long-term or short-term? Usage Frequency : Will it be used daily or only occasionally? : Will it be used daily or only occasionally? Budget Flexibility : Do you prefer lower monthly payments or long-term ownership? : Do you prefer lower monthly payments or long-term ownership? Tax Benefits: Some leases and loans qualify for Section 179 deductions. For a comprehensive guide tailored to your needs, explore these detailed Construction Equipment Finance Options. Investing in the right construction equipment is essential—but so is choosing the right way to finance it. Whether you're a start-up contractor or an established firm expanding your fleet, the right financing solution can save you time, money, and stress. Understanding all available construction equipment finance options will empower you to make strategic decisions that fuel your business growth while protecting your bottom line. TIME BUSINESS NEWS
Yahoo
27-04-2025
- Business
- Yahoo
Grant Cardone Reveals How Anyone Can Lower Their Tax Bill: 'If You Can't Write It Off, Don't Buy It'
Grant Cardone does everything he can to minimize his income taxes. The real estate investor and bestselling author moved to Florida to avoid state income taxes, and he also uses various assets to minimize his federal income taxes. Cardone recently laid out the playbook for reducing your taxable income on paper to keep more of what you earn. However, he started right out of the gate by telling people what they shouldn't do with their money. "If you can't write it off, don't buy it," Cardone stated in an X post. Don't Miss: Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – How do billionaires pay less in income tax than you?. Anyone can use these strategies to trim their tax burden. While there are more tax-saving tactics you can use if you speak with a professional, Cardone's post offers a head start. Cardone's first tip for lowering your taxes was to invest in real assets and claim depreciation. It makes sense that this tip would be on the top of Cardone's list. He has a $5 billion real estate portfolio and regularly looks for new deals. Real estate investors can use depreciation to artificially reduce their taxable income. However, it gets even better for investors who regularly buy properties and use Section 179 of the tax code. This part of the tax code allows an investor to write off an entire property's value in one year. For instance, if an investor earns $1 million and buys a $1.5 million property, they can show a $500,000 net loss when they report to the IRS. Trending: It's no wonder Jeff Bezos holds over $250 million in art — You have to fulfill certain conditions to be eligible for Section 179 of the tax code. However, if you're eligible, you can save a lot of money while investing in real assets. This tax strategy also works with any vehicle that is more than 6,000 pounds. Cardone is a fan of the "Buy, Borrow, Die" model, which involves borrowing against assets instead of selling them. Assets can gain value over time, especially inflation hedges like real estate. If you borrow against these assets instead of selling them, you don't have to pay any capital gains taxes. Furthermore, you still get to benefit from any cash flow and appreciation. As your net worth grows, you get to borrow cash at lower interest rates. Billionaires get lower interest rates than most people because they are the banks' largest customers. As you grow wealth, it becomes cheaper to borrow money. You can gradually pay back debt and still get to keep your assets when it's all said and owners and side hustlers can set up home offices and deduct it for tax purposes. It's extra money that the IRS is willing to let you keep as long as you have the right documentation. Finally, if you're going the business route, you might as well put your kids on payroll. Cardone recommends this strategy because your kids will receive a lower tax rate than you would at your highest dollar. Your children can also take advantage of the standard tax deduction to further reduce how much they pay. Meanwhile, it will show up in your finances as a business expense, which will reduce your taxable income. Most parents want to give their children inheritances anyway. Setting them up as business employees allows you to give them the money without the government taking some of it away. You also end up with a lower tax bill. Read Next:Inspired by Uber and Airbnb – Deloitte's fastest-growing software company is transforming 7 billion smartphones into income-generating assets – Image: Shutterstock Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article Grant Cardone Reveals How Anyone Can Lower Their Tax Bill: 'If You Can't Write It Off, Don't Buy It' originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved.
Yahoo
25-04-2025
- Business
- Yahoo
Grant Cardone Reveals How Anyone Can Lower Their Tax Bill: 'If You Can't Write It Off, Don't Buy It'
Grant Cardone does everything he can to minimize his income taxes. The real estate investor and bestselling author moved to Florida to avoid state income taxes, and he also uses various assets to minimize his federal income taxes. Cardone recently laid out the playbook for reducing your taxable income on paper to keep more of what you earn. However, he started right out of the gate by telling people what they shouldn't do with their money. "If you can't write it off, don't buy it," Cardone stated in an X post. Don't Miss: Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – How do billionaires pay less in income tax than you?. Anyone can use these strategies to trim their tax burden. While there are more tax-saving tactics you can use if you speak with a professional, Cardone's post offers a head start. Cardone's first tip for lowering your taxes was to invest in real assets and claim depreciation. It makes sense that this tip would be on the top of Cardone's list. He has a $5 billion real estate portfolio and regularly looks for new deals. Real estate investors can use depreciation to artificially reduce their taxable income. However, it gets even better for investors who regularly buy properties and use Section 179 of the tax code. This part of the tax code allows an investor to write off an entire property's value in one year. For instance, if an investor earns $1 million and buys a $1.5 million property, they can show a $500,000 net loss when they report to the IRS. Trending: It's no wonder Jeff Bezos holds over $250 million in art — You have to fulfill certain conditions to be eligible for Section 179 of the tax code. However, if you're eligible, you can save a lot of money while investing in real assets. This tax strategy also works with any vehicle that is more than 6,000 pounds. Cardone is a fan of the "Buy, Borrow, Die" model, which involves borrowing against assets instead of selling them. Assets can gain value over time, especially inflation hedges like real estate. If you borrow against these assets instead of selling them, you don't have to pay any capital gains taxes. Furthermore, you still get to benefit from any cash flow and appreciation. As your net worth grows, you get to borrow cash at lower interest rates. Billionaires get lower interest rates than most people because they are the banks' largest customers. As you grow wealth, it becomes cheaper to borrow money. You can gradually pay back debt and still get to keep your assets when it's all said and owners and side hustlers can set up home offices and deduct it for tax purposes. It's extra money that the IRS is willing to let you keep as long as you have the right documentation. Finally, if you're going the business route, you might as well put your kids on payroll. Cardone recommends this strategy because your kids will receive a lower tax rate than you would at your highest dollar. Your children can also take advantage of the standard tax deduction to further reduce how much they pay. Meanwhile, it will show up in your finances as a business expense, which will reduce your taxable income. Most parents want to give their children inheritances anyway. Setting them up as business employees allows you to give them the money without the government taking some of it away. You also end up with a lower tax bill. Read Next:Inspired by Uber and Airbnb – Deloitte's fastest-growing software company is transforming 7 billion smartphones into income-generating assets – Image: Shutterstock Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article Grant Cardone Reveals How Anyone Can Lower Their Tax Bill: 'If You Can't Write It Off, Don't Buy It' originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
Yahoo
10-04-2025
- Business
- Yahoo
Small-Business Owners: 7 Tax Tricks To Maximize Your Refund
As a small-business owner, tax season can feel overwhelming, to say the least. However, with the right strategies, you can turn tax time into a chance to boost your bottom line. Find Out: Learn More: GOBankingRates spoke with small-business owners who shared their best tax tricks to help you maximize your refund this year. 'As a small-business owner, one of the most effective ways to lower your taxable income and maximize your refund is by taking advantage of the Internal Revenue Service's Section 179 deduction,' explained Thomas J. Brock, CFA, CPA, an expert for RetireGuide. 'This aspect of the tax code allows you to deduct the full purchase price of tangible property, such as machinery and equipment purchased for use in a trade or business, in the year of purchase rather than depreciating it over time.' If you've invested in essential business equipment during the tax year, this could mean huge savings. Read Next: If you work from home, don't overlook this valuable deduction. 'Generally, to claim this valuable tax break, you must exclusively and regularly use part of your residence as your primary place of business,' Brock said. He also shared that, per the IRS, taxpayers who qualify for the home office deduction can choose one of the following two methods to calculate the allowance. 'The regular method allows direct expenses to be deducted in full. Indirect expenses, such as mortgage interest, property taxes, utilities and homeowners insurance, are based on the percentage of the residence devoted to business use,' he said. Alternatively, there is a simplified option in which $5 per square foot of the home used for business purposes is deducted, for a maximum of 300 square feet. According to Jonah M., owner of a script consulting business, there's a big difference between someone who simply files your taxes and someone who helps you strategize. 'I made the switch from using a traditional CPA to working with a dedicated tax strategist three years ago, and it's saved me thousands annually,' he said. A good tax strategist doesn't just look at what happened last year but helps you plan for the coming years to minimize your tax burden legally and effectively. Small-business owners have access to powerful retirement savings options, like SEP IRAs, SIMPLE IRAs and solo 401(k) plans, that offer higher contribution limits than traditional employee plans. 'Contributing the maximum amount to your retirement accounts serves two purposes,' Jonah said. 'It helps secure your future while providing immediate tax benefits by reducing your taxable income for the current year.' If you use your vehicle for business purposes, you can deduct these expenses using either the standard mileage rate or the actual expenses method. Most small-business owners don't realize how quickly vehicle deductions can add up. 'I keep a dedicated logbook in my car and use a mileage tracking app as backup,' Jonah said. 'I started doing this in earnest last year, and I caught about $3,000 that I definitely would've missed before.' 'The QBI deduction can allow eligible small-business owners to deduct up to 20% of their qualified business income,' said Arron Bennett, CEO of Bennett Financials. He added that this strategy is often overlooked, but it can be a game-changer, especially for those in pass-through entities like S-corporations, partnerships and sole proprietorships. Bennett recommended reviewing your entity structure to see if you're eligible for this deduction. 'If that's the scenario, ensure that you're exceeding the minimums and not giving yourself any leeway for mistake by seeking out a tax expert so that you can completely maximize this benefit,' he said. 'Depending on the location of your business, you might be able to qualify for state and local tax credits or incentives,' Bennett said. 'These can vary from credits for hiring employees in a particular location to incentives for being green. Small-business owners do not think about these often, but they can be extremely cost-saving.' He said he always suggests staying up to date on local programs that can help business owners save money. Tax planning shouldn't be a once-a-year scramble. By implementing these strategies throughout the year and working with qualified professionals, small-business owners can significantly reduce their tax burden while staying compliant with IRS regulations. Remember that tax laws change frequently, so staying informed or working with a knowledgeable tax professional is crucial to ensuring you're taking advantage of all available benefits for your small business. More From GoBankingRates6 Reasons Your Tax Refund Will Be Higher in 2025 7 Tax Loopholes the Rich Use To Pay Less and Build More Wealth 10 Cars That Outlast the Average Vehicle This article originally appeared on Small-Business Owners: 7 Tax Tricks To Maximize Your Refund Sign in to access your portfolio
