No matter how you cut it, small businesses are strongly encouraged to invest in machinery under the new tax law. The carrots of choice, regardless of the type of legal entity, are the section 179 tax deduction and the 100% bonus depreciation deduction.
The section 179 tax deduction on equipment and machinery has been raised to $1 million. Also, the cap on total annual investments (before the dollar-for-dollar phase out begins) has been raised to $2.5 million; however, the maximum allowance still cannot exceed the amount of income derived from the business activity. The section 179 deduction has been further buoyed by a very generous bonus depreciation deduction, which has been doubled to 100% for 5 years. Yes, 100%.
C corporations get a special boost, and more money for investments, more growth
On top of the swell benefits of raising funds through various forms of stock, and being open to the gold-lined pockets of wealthy foreign investors (i.e., non-US citizens can own corporate stock), small businesses set up as C corporations now enjoy a flat federal corporate tax rate of 21%.
As well, cash accounting is now available to corporations (except tax havens) with average gross receipts for the prior 3 years under $25 million. This allows smaller, simpler cash-accounting C corporations to be 5 times larger than they were under the previous $5 million rule. And importantly, because they are much bigger fish in a small pond, they can usually qualify for larger lines of credit at their current bank and take advantage of even more business opportunities. They can purchase new machinery absolutely necessary for milling and machining highly-profitable value-added workpieces and for meeting growing customer orders.
These changes make them more competitive through greater investments, and they still retain the advantages of lower corporate taxes, the section 179 deduction (although the same threshold of $2.5 million applies), and the 100% bonus depreciation deduction.
US Dealer Program on the move with Mr. Sam Sikandar hosting more Open House events in 2018
Mr. Sam Sikandar, International Trade Officer & Corporate Legal Adviser for LUCAS, has noted the uptick in interest with recent New Year Tax overhaul:
With all the benefits of the new federal tax law, small businesses across the US requiring powerful and precise table-type horizontal boring mills, such as FERMAT’s WFC 10 CNC, WFT 13 CNC or LUCAS 5, find many models quite affordable and are lining up with interest. Dealers are especially enthusiastic to see firsthand where LUCAS machines are built at FERMAT’s manufacturing facilities in Prague, Lipnik nad Becvou, and Brno, Czech Republic. New dealers are already coming in for tours in 2018, with one planned as early as next month. 2018 will be a great year for LUCAS, FERMAT, and manufacturing and metalwork across the board.
Please visit, http://www.fermatmachinery.com/products, for information on the different FERMAT machine tools and accessories that can improve your manufacturing business. Also, try to Build Your Own machine using our on-line configurator found on our homepage, http://www.fermatmachinery.com/. Should you have any enquiries, please send us an e-mail: firstname.lastname@example.org, or for the U.S. market, e-mail Lucas Precision, a FERMAT Group company: email@example.com, or call toll-free: 1-800-336-1262, or telephone in the U.S.: (216) 451-5588, or send us a fax (216) 451-5174. For dealers in the US, feel free to call Mr. Sam Sikandar on his US number, (216) 302-2649.