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//// Business · Equipment · Tax

Lease vs Buy Equipment

True NPV comparison: buying with §179 first-year expensing vs leasing with monthly deductions. See which option is actually cheaper after taxes and time value of money.

Corp Tax Rate21%
SE Threshold$400
FICA Cap 2024$168,600

Purchase (Buy Path)

Lease Path

Shared Assumptions

NPV Cost to Buy
$8,312
after §179 + salvage
NPV Cost to Lease
$8,524
36-month term, after-tax
Winner
Buy Wins
saves $211
Savings
$211
2.5% cheaper to buy

Buying is cheaper by $211 (2.5%) on a present-value basis. The §179 first-year expensing and salvage recovery more than offset the upfront capital outlay versus leasing.

§179 Deduction
$12,000
PV Tax Savings
$2,667
PV Salvage
$1,021
Lease Total (gross)
$12,600