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Why Now Might Be the Perfect Time to Invest in Aluminum End Dump Trailers and Dump Bodies
If you’re considering upgrading your equipment, now might be the perfect time to act. While interest rates are higher, there are still significant tax incentives and operational savings that make purchasing new equipment before the end of the year a smart financial move. Here’s everything you need to know about how upgrading your equipment can be a cash gain right out of the gate, how tax incentives like Section 179 work, why timing is important, and how financing options can help.
What Is Section 179 and How Does It Save You Money?
Section 179 is a part of the tax code that lets businesses deduct the full price of qualifying equipment purchases for the year they’re bought. Rather than spreading the deduction out over several years, Section 179 allows you to take it all upfront, which means more immediate savings.
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2024 Deduction Limits: This year, Section 179 allows you to deduct up to $1,220,000 in equipment costs. This includes aluminum end dump trailers and dump bodies. The phase-out begins at $3,050,000 in total equipment purchases. The equipment must be primarily for business use (more than 50%).
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Bonus Depreciation: Another way to save big beyond Section 179, an additional incentive called “bonus depreciation,” allows you to deduct even more of the equipment’s cost in the first year. For 2024, bonus depreciation offers a 60% deduction. This 60% is set to decrease in future years.
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Do You Qualify? To benefit from Section 179, your equipment has to be used for business purposes (more than 50%) and must be ready to use by December 31, 2024. So, if you purchase a new dump trailer or dump body it must be delivered or operational before the new year to qualify for this year’s deduction.
How Much Can You Save with Tax Incentives? (A Hypothetical)
To give you an idea of how much these tax incentives can save you, let’s look at a hypothetical example. Suppose your business purchases a $75,000 aluminum end dump trailer and qualifies for both Section 179 and bonus depreciation.
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Section 179 Deduction: You could deduct the entire $75,000 purchase price right away, lowering your taxable income by that amount.
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Bonus Depreciation (60%): If you exceed the Section 179 limit or don’t take the full deduction, you could still use bonus depreciation to deduct $45,000, adding even more tax savings.
These deductions could save your business thousands of dollars on taxes, which helps offset the initial cost and even reduces the impact of higher interest rates.
How Upgrading Your Equipment Can Start Paying Off Right Away. (Another Hypothetical)
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Say your steel trailer weighs 14,000 lbs. It's in fair shape and would easily sell for $25,000. There’s a new trailer that only weighs 10,000 lbs, and costs $75,000. Monthly cost for upgrading would be about $1500. But, now you can haul 4,500 lbs more material. Conservative data tells us you make about $6.00/year for every pound you haul. The 4,500 lbs will add about $27,000 in revenue, or, $2,250/month. It's a cash gain right out of the gate.
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Maintenance costs and downtime will drop with new equipment. Hicks's weld-free design outlasts the competition and increases your uptime.
Consult with a Tax Professional to Maximize Your Savings
We recommend consulting a tax professional to confirm your equipment qualifies for Section 179, bonus depreciation and ensure you meet requirements. A tax expert can help you avoid any last-minute surprises and give you peace of mind that you’re maximizing your deductions. Here are a few avenues to finding the guidance you need:
- IRS Directory of Federal Tax Return Preparers: The IRS provides a directory of tax preparers with credentials and select qualifications. This tool helps you find professionals in your area who hold recognized credentials or have completed the Annual Filing Season Program.
- RamseyTrusted Tax Advisors: Endorsed by financial expert Dave Ramsey, these tax advisors are vetted professionals, including Certified Public Accountants (CPAs) and Enrolled Agents (EAs), available across the country.
- Thumbtack: Thumbtack is an online service that connects you with local professionals, including tax preparers. You can read reviews and compare prices to find a tax professional near you.
Find the Best Financing Options for Your Purchase
There are some solid options available to help you with an equipment purchase before the end of the year. Two companies known for providing equipment financing include:
- Crest Capital: Crest offers financing for new and used equipment, with flexible loan terms and no age limits on used trailers. They provide fixed rates and a quick online application, making it simple to secure financing.
- Truck Lenders USA: Truck Lenders USA is another lender that specializes in commercial truck and trailer financing. They offer flexible financing plans, including leases and loans, designed specifically for businesses needing heavy-duty equipment like dump trailers.
Hicks's lightweight, weld-free, fully customizable design for your specific hauling needs is built for increased payload. Hicks redefines strength and durability, offers modularity, reduces maintenance and downtime, and outlasts the competition.
Contact Hicks and let us help you find the right equipment to maximize your hauling potential and secure valuable tax savings this year! 