If you’ve been considering replacing your current cargo van or pickup truck, here’s something for you to consider as we approach the end of the year. Before you read any further, I want to make it clear that LeBlanc Nissan does not or is not offering tax advice.

A tax change was implemented in the fall of 2010 called the Small Business Jobs Act that offers a significant tax savings incentive for small businesses to invest in new equipment as outlined by the IRS in Section 179. LeBlanc Nissan is not in the business of offering tax advice, however, we would like to suggest that you consult your accountant and tax advisor concerning IRS Section 179 and accounting procedures that may have some significant tax advantages for your business to consider.

What is a Section 179 Deduction?

Section 179 of the IRS Tax Code allows certain businesses to deduct, for the current tax year 2011, the full purchase price of financed or leased equipment like Nissan Vans (NVs). The equipment can be purchased or leased and be within the specified dollar limits of Section 179. The equipment must be placed into service in the same tax year that the deduction is taken. For example: For 2011, this means the equipment or NV purchase must be put into service between January 1, 2011 and December 31, 2011.

Here’s an easy example using the purchase of a vehicle with a capitalized cost of $30,000. (Note: An NV costs between $25,000 and $32,000…depending on model and equipment options.)

Possible Section 179 Depreciation Deduction:

Cost of Equipment: $ 30,000
Section 179 Depreciation Deduction: $ 30,000
50% Bonus Deprecation Deduction (on any remaining First Amount over $500,000): $ 0
Regular First Year Deduction: $ 0
Total First Year Deductions: $ 30,000
Cash Savings on your Equipment Purchase (assuming a 35% tax bracket): $ 10,500
Effective Cost of Equipment after Tax Savings: $ 19,500

This does not mean the vehicle must be paid in full or in cash during 2011! The vehicle can be financed or leased and you may qualify for additional tax savings according to Financial Accounting Standards 12 along with the Section 179 deduction with the IRS.

Also, I want to let you know that Nissan is offering special financing and a $700 rebate on all NVs through the end of the year.