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 reduce the purchase of the machine by thousands of dollars,  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 cost of the machine can be reduced significantly – 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

With the tax breaks you will receive through Section 179, plus the dollars saved on each job, a gutter machine purchase is a great way to bring in a considerable amount of extra profit in the first year alone, plus you get the extra benefits of more control over your business, which translates into better customer service overall and more peace of mind for the small business owner.

As with any large purchases for your business, and/or tax incentives such as Section 179, we strongly recommend discussing these with your accountant or tax consultant before making any major decisions.

Check out our selection of Gutter Machines here.

Author: Mike Milliman

Mike is managing partner at Gutter Supply Inc. and has over 20 years of experience in the industry. His expertise and vast knowledge of the industry, along with his priority on customer service, has contributed to the continued success of Gutter Supply, it’s contractor customers and homeowner DIY’s. View all posts by Mike Milliman