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Tax Advantages

After Tax Costs of a FMV Lease

Term of Lease 36 months 48 months 60 months
Monthly Payment $3120 $2560 $2130
Tax Savings, 40% fed, state ($1248) ($1024) ($852)
After tax cost per month $1872 $1536 $1278
  • Based on $100,000- equipment cost as an example. Payments based on good credit.
  • Taxes not included.
  • After tax based on 34% federal and 6% state tax brackets, your individual results may vary.
  • This is meant as a guide, consult with your accountant to review your particular situation. Avalon welcomes your call and those from your accountant.

After Tax Cost of a Capital Lease

IRS Section 179 Expensing allows businesses to expense the cost of equipment acquired in the year it is placed into service. Think of it as one year depreciation. The allowance is up to $250,000 of qualified equipment for the year 2008. If leased under a one dollar or ten percent fixed option, the equipment still is eligible for immediate tax savings under this beneficial tax treatment.

Sample Section 179 Tax Savings Calculation

Cost of Equipment $100,000.00
Section 179 Expensing $100,000.00
Tax Savings, 34% bracket $34,000.00
After Tax Cost $66,000.00
   
36 Month Lease Payment $3,320.00
Number of "free" payments 10.24
60 Month Lease Payment $2,190.00
Number of free payments 15.52
  • Tax savings are realized when the U S. tax return is filed for the current year.
  • Tax savings can not exceed income.
  • Section 179 guidelines are available on the IRS web site, or consult with your accountant. This excellent incentive is geared towards small and medium size businesses.
  • Payments based on good credit. Call Avalon Leasing to discuss your particular needs.
  • "Free" payments based on tax savings. Take advantage of one of the top business tax breaks of recent history.

In the event these tax savings benefit your organization, please proceed to our one page credit application.