A Leading Provider in Equipment Financing

The Tax Implications of an Operating Lease

The Tax Benefits of an Operating Lease Depends on the Asset Leased

While capital leases and their tax advantages are in the spotlight due to changes in the Section 179 deductions for 2018, operating leases may still offer tax benefits depending on the type of asset leased. Under an operating lease, the lessor maintains ownership of the asset and the associated deductions, while the lessee deducts lease payments as an operating expense and records those payments on the Profit & Loss statement as they’re paid or incurred.

The ability to deduct payments on an operating lease as an operating expense is one of the most popular tax advantages of this lease type. However, an operating lease’s tax advantages depends on the type of asset you lease.

You might see a greater tax break from the direct expense of each lease payment if the equipment (asset) you’re leasing is anticipated to become obsolete before the entire value can be depreciated off your books. Internal Revenue Service (IRS) regulations determine the amount of depreciation that can be expensed, and the IRS dictates the lifespan of the equipment under normal use.

Another advantage is that you can offset operating expenses dollar for dollar against income earned, reducing your net profit, and thus, your tax obligation.

Read: How do capital lease tax advantages compare?

Whether your equipment lease is classified as a capital or an operating lease has significant implications. Your business’s tax situation is unique to you and your company, so you must determine what classification is most beneficial for your business. The most common distinction being that capital leases allow you now to deduct the full purchase price of equipment in the year it was put in use, while operating leases allow you to deduct lease payments as operating expenses for the term of the lease, reducing your taxable income.

As with all business transactions, a trusted professional can help you determine which type of lease will provide you with the maximum tax advantages based on your goals and financial situation. Global Financial & Leasing Services (GFLS) has been providing financial resources to help small and mid-sized companies gain the equipment they need to grow since 2009. Our team is known for looking beyond credit scores and history to find financing that works for you. Have a question about equipment financing? Contact us.

People Are Talking . . .

Malcolm, President Specialty Contracting Company

Judi, thanks for your support. We are building something here and having folks like yourself on our side makes all the difference!
Global Financial and Leasing Client Testimonials
2019-03-20T07:22:06-07:00
Judi, thanks for your support. We are building something here and having folks like yourself on our side makes all the difference!

T. Poague

Been with these guys for over a year they helped me get my business started it hasn’t went as planned but these guys have worked with me in every way possible my hats off to to mr Ira ,Mrs Judi and mr Sean guarantee I will use them for any of my business financing if possible Great folks

Global Financial and Leasing Client Testimonials
2019-06-27T06:11:01-07:00
Been with these guys for over a year they helped me get my business started it hasn’t went as planned but these guys have worked with me in every way possible my hats off to to mr Ira ,Mrs Judi and mr Sean guarantee I will use them for any of my business financing if possible Great folks

IT/Telecom Vendor Sales Rep

Judi, the thanks is all yours!! You made this happen very smoothly. I am your loyal customer from here on.
Global Financial and Leasing Client Testimonials
2019-03-20T07:22:31-07:00
Judi, the thanks is all yours!! You made this happen very smoothly. I am your loyal customer from here on.

R. Lowery

Had a great experience with Patrick. He was very knowledgable with regard to our specific needs! Thank you!

Global Financial and Leasing Client Testimonials
2019-06-27T06:12:47-07:00
Had a great experience with Patrick. He was very knowledgable with regard to our specific needs! Thank you!

JH, Medical Vendor Rep

Thank you, Judi, you are the best ... So understanding of the complexities of this crazy industry and compassionate enough to work with people in difficult circumstances, there is a special place in heaven for you and Jim.

Global Financial and Leasing Client Testimonials
2019-03-20T07:26:35-07:00
Thank you, Judi, you are the best ... So understanding of the complexities of this crazy industry and compassionate enough to work with people in difficult circumstances, there is a special place in heaven for you and Jim.

Byron Waters

Great folks over at Global. Julian and his Team have helped us out several times always an easy process

Global Financial and Leasing Client Testimonials
2019-06-27T06:13:06-07:00
Great folks over at Global. Julian and his Team have helped us out several times always an easy process

CP – Medical Vendor

I want to thank you both so much for doing a wonderful job with my customers. You truly go the extra mile to assist them with their financing needs.
Global Financial and Leasing Client Testimonials
2019-03-20T07:32:35-07:00
I want to thank you both so much for doing a wonderful job with my customers. You truly go the extra mile to assist them with their financing needs.

Alyson

Very good people.

Global Financial and Leasing Client Testimonials
2019-06-27T06:13:28-07:00
Very good people.

SS, Medical Vendor

I certainly appreciate all the effort and hard work that you put into our customers. Your dynamics show us even when the financial situations are shaky that you still come through with positive outcome. Thank you so much for your hard work!
Global Financial and Leasing Client Testimonials
2019-03-20T07:32:54-07:00
I certainly appreciate all the effort and hard work that you put into our customers. Your dynamics show us even when the financial situations are shaky that you still come through with positive outcome. Thank you so much for your hard work!

Michael B.

Not be any happier with this company.

Global Financial and Leasing Client Testimonials
2019-06-27T06:40:57-07:00
Not be any happier with this company.

President, Plumbing Company

Just wanted to thank you again! I just picked up five new vehicles from a lease I acquired from your friend! I am so excited! Again I cannot thank you enough for all that you have done for me!
Global Financial and Leasing Client Testimonials
2019-03-20T07:37:24-07:00
Just wanted to thank you again! I just picked up five new vehicles from a lease I acquired from your friend! I am so excited! Again I cannot thank you enough for all that you have done for me!

Hollie Aneshansley

Amazing opportunity these wonderful people gave me♡

Global Financial and Leasing Client Testimonials
2019-06-27T06:41:30-07:00
Amazing opportunity these wonderful people gave me♡

President, Plumbing Company

Just wanted to thank you again! I just picked up five new vehicles from a lease I acquired from your friend! I am so excited! Again I cannot thank you enough for all that you have done for me!
Global Financial and Leasing Client Testimonials
2019-03-20T07:37:57-07:00
Just wanted to thank you again! I just picked up five new vehicles from a lease I acquired from your friend! I am so excited! Again I cannot thank you enough for all that you have done for me!

Shaun Land

Great organization to work with. Very friendly staff and a good business partner.

Global Financial and Leasing Client Testimonials
2019-06-27T06:41:50-07:00
Great organization to work with. Very friendly staff and a good business partner.

J, Medical Vendor

It was the best quarter in my 4+ years at XXX!! You guys were a BIG part of it!! Thank You!!!
Global Financial and Leasing Client Testimonials
2019-03-20T07:38:11-07:00
It was the best quarter in my 4+ years at XXX!! You guys were a BIG part of it!! Thank You!!!

I Was Able To Open Business!

Global Financial is the best finance company I have ever dealt with. They are easy to work with and answer all questions you may have. They have made it possible for me to build my business with as little money out of pocket as possible. Without Global Financial, I wouldn't have been able to even open my apparel printing business. I would recommend this company to all business with financing needs. They are definitely my go to finance company any time I need to buy business equipment. I currently have 2 leases with them and have a long history working with them. They are great!

Global Financial and Leasing Client Testimonials
2020-06-25T12:51:44-07:00
Global Financial is the best finance company I have ever dealt with. They are easy to work with and answer all questions you may have. They have made it possible for me to build my business with as little money out of pocket as possible. Without Global Financial, I wouldn't have been able to even open my apparel printing business. I would recommend this company to all business with financing needs. They are definitely my go to finance company any time I need to buy business equipment. I currently have 2 leases with them and have a long history working with them. They are great!

R. Morris, CFO & Treasurer SerenaGroup, Inc.

Global provided our company with financing resources when every other firm said no. Both Jim and Judi Jenks have been supportive beyond any experience I’ve had with other financing firms, their professionalism and “going the extra mile” for their client was the norm, not the exception. I highly recommend Global for your financing needs as you will be dealing with people who truly practice what they preach.
Global Financial and Leasing Client Testimonials
2019-03-20T07:38:25-07:00
Global provided our company with financing resources when every other firm said no. Both Jim and Judi Jenks have been supportive beyond any experience I’ve had with other financing firms, their professionalism and “going the extra mile” for their client was the norm, not the exception. I highly recommend Global for your financing needs as you will be dealing with people who truly practice what they preach.

Honor and Privilege Working With You!


I appreciate the recap of Sch 021.  Somehow we have muddled through the  lease payments for Sch 021 and it's exciting to be so close to owning. 



 



Thank you for all your help and patiences through some of our more difficult moments.



 



It is such an honor and privilege working with you.



 



All the best,



Tracie

Global Financial and Leasing Client Testimonials
2020-08-11T13:31:36-07:00
I appreciate the recap of Sch 021.  Somehow we have muddled through the  lease payments for Sch 021 and it's exciting to be so close to owning.    Thank you for all your help and patiences through some of our more difficult moments.   It is such an honor and privilege working with you.   All the best, Tracie

M.C., President Wound Care Management Company

GFRS has allowed our business the growth we needed and given us an exceptional partner we can count on. Other leasing firms were merely interested in looking for certain numbers to meet in the short term. J.D. Jenks, CEO, understood our business model, why we needed what we needed.
Global Financial and Leasing Client Testimonials
2019-03-20T07:38:42-07:00
GFRS has allowed our business the growth we needed and given us an exceptional partner we can count on. Other leasing firms were merely interested in looking for certain numbers to meet in the short term. J.D. Jenks, CEO, understood our business model, why we needed what we needed.

D. Williams, Owner Discovery Ultrasound

Sweet! Thank you so much for all of your help and incredible speed. I just wanted to tell you that this new piece of equipment will be a game changer for my business. No one within 250 miles of me has one. I will crush my competition!
Global Financial and Leasing Client Testimonials
2019-03-20T07:39:06-07:00
Sweet! Thank you so much for all of your help and incredible speed. I just wanted to tell you that this new piece of equipment will be a game changer for my business. No one within 250 miles of me has one. I will crush my competition!
0
0
Global Financial and Leasing Client Testimonials