04 Feb, 2013

The ROI of GPS Tracking Pt. 4 – Section 179 Tax Incentives

04 Feb, 2013

This four-part series has already covered how to get a return on your investment (ROI) with GPS tracking through fuel savings, increased productivity, and insurance discounts. Did you also know that investing in GPS tracking can help your company save on taxes? The Section 179 tax incentive has been extended and increased for 2013, which means that your small business can benefit even more from new equipment purchases.

Tax Incentives for GPS Tracking Equipment Purchases

There are two tax incentives that you need to know about if you manage a fleet:

  1. Section 179 Deduction – For 2013 (and retroactively for 2012) you can deduct up to $500,000 of equipment purchases if you have less than $2 million in capital expenditures.  For many small businesses, this can make a significant impact on the bottom line.
  2. Bonus Depreciation – If your business makes more than $2 million in capital purchases, you may be eligible for bonus depreciation. If you qualify, you can depreciate certain equipment up to 50% in the year it was purchased.

The type of equipment that is eligible for the Section 179 deduction includes business vehicles over a certain weight, machines, computers, office equipment, and software purchased for business use. Vehicle tracking systems are included in this list as long as they are used in the course of conducting business. Learn more about this important tax incentive for small businesses at section179.org.

When you factor tax savings into the equation, the cost of GPS tracking becomes even more affordable for businesses of all sizes. If you purchased GPS tracking equipment for your fleet in 2012, talk to your tax adviser about whether you are eligible to claim a Section 179 deduction. The limits were retroactively raised for 2012, so you might benefit from unexpected savings. Depending on the size of your fleet and your other equipment purchases throughout the year, you may be able to save thousands of dollars in tax incentives.

As an example, assume you spend $10,000 on a new vehicle tracking system and fall in a 35% tax bracket. You can save $3,500 on tax payments simply by using the Section 179 deduction. Add fuel savings, more effective use of your staff, and insurance discounts and you will see a return on your investment much more quickly than you might have expected. Of course, you’ll get all the other benefits of fleet GPS at the same time.

GPSTrackIt is here to help you select the best GPS tracking system for your fleet. Request a quote today and we’ll work with you to estimate when you will see a return on your investment. Many companies recoup the initial expense in just a few months and then enjoy monthly savings for the life of the system.

How much do you think you could save on taxes by implementing fleet GPS this year?

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