Tax Benefits For Business Owners And CRE Investors

As the year draws to a close, many entrepreneurs are getting prepared to file taxes. While there are many changes on deck in Washington, D.C. regarding the current tax code, there are still tax benefits offered to entrepreneurs. Whether you own a business, or have a career as an independent commercial real estate investor, understanding the tax benefits available can help you save money or reduce the amount you have to pay to the IRS.

Section 179 Tax Benefits For Business Owners

Section 179 tax benefits are primarily designed to allow business owners to recoup expenses on equipment and other assets. These days, equipment covers a very broad spectrum, including software, office furniture, and even phones. On owned assets, business owners can claim a write off on the initial cost of the equipment. Every year thereafter, owned assets depreciate, which means business owners must follow the guidelines laid out by the IRS to recoup the costs of itemized deductions. As always, the IRS likes to see proof of purchase, so save receipts to back up our itemized claims. There is also a cap on the amount of money business owners can claim through Section 179 tax benefits.

Leased Equipment And Tax Benefits

Itemized deductibles work similarly for leased equipment. The major difference is that leased equipment does not follow depreciation tables. The amount paid through leasing agreements can be claimed when filing taxes, up to a limit of $500,000. This even works for amounts paid through seller leaseback financing. Since leasing companies issue regular invoices, the hassle of chasing down receipts for individual items is removed from the process.

Tax Benefits For Commercial Real Estate Investors

The same deductions outlined in Section 179 for business owners also applied to commercial real estate investors, especially with owner occupied properties. On multifamily properties where the owner occupies one of the units, any materials used for repairs and improvements can be claimed as deductibles, provided there are receipts to backup the claims. There are other ways to reduce taxes, as well, based on property type, 1031 exchanges, and other guidelines provided in the IRS Tax Code.

Consulting The Professionals

If you are looking for additional tax benefits for your business, it is always best to consult with an accountant or professional tax service. At BG Capital Funding Group, we specialize in equipment financing and solutions for commercial real estate investors. Contact our offices today at 702-605-3100 to learn more about the benefits our financing solutions offer to entrepreneurs.


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