If you’re in the exterior remodeling business, you handle a lot of gutter projects. If you haven’t already bought one, you have been thinking about purchasing a gutter machine. These machines allow you to manufacture your own gutters, which greatly reduces both the cost and time invested in each gutter job. In turn, this increases your profits steadily over time.
Unfortunately, the small business owner is wary of making large purchases such as this one. Unlike large corporations who won’t miss those few thousand dollars, a small business has the potential to heavily feel that investment. With the average gutter machine costing anywhere between $5,500 and $15,000, this is a very big consideration.
But what if you could not only manage the purchase of a gutter machine for free but also make a considerable amount of profit from the machine at the end of the year? It’s actually very simple.
Section 179 Tax Code
The Section 179 tax code is a government incentive for small businesses to purchase equipment and invest in themselves. This is great for the local economy and assists in helping business owners achieve their dreams – one little step at a time.
The tax code varies slightly by year, so you will want to continually check what the limitations are for that year prior to making any large purchases that you plan to write off. When you do your business’ year-end taxes, you can write off a certain amount of money used to purchase or rent equipment.
There are a few limitations that must be met to use the section 179 tax code. Most small businesses, however, easily meet the guidelines. These include:
- Companies can only write off up to one million worth of approved equipment purchases or rentals
- Business’ can only purchase up to $2.5 million worth of approved items to qualify
- Items written off must be used more than half the time for work-related purposes (meaning you can write off a personal vehicle as a business expense)
A piece of equipment such as a gutter machine can be written off in its entirety when a company files taxes at the end of the year. This means the machine is basically free – so long as the above conditions are met, of course.
Average Rate of Return in One Year Without Section 179
Without considering the tax break, a gutter machine still pays for itself very quickly. The gutter runs anywhere between $4 and $33 per square foot, depending on the size and materials used. An average home requires 100 to 300 square feet of gutter. The average small business will have between one and four jobs each month. This averages out to a net profit (before material costs are taken into consideration) of anywhere between $4,800 and $475,200 in a single year.
Actual Cost of Gutter Machine at End of Year
This means that a gutter machine wouldn’t only be free through utilizing the section 179 tax break but would end up bringing in a considerable amount of profit in the first year alone.
Check out our selection of Gutter Machines here.