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Don’t Miss Out On The Section 179 Tax Deduction For 2021!

December 20, 2021 

We’re rocketing toward the new year, but before the ball drops on 2021, there is still time to make buying and selling decisions that will have positive impact on your company this calendar year.

Government Incentives For Business-Related Purchases: If you own a small- or mid-sized US-based business, you may already know about the Section 179 tax deduction, which allows a business to deduct the full purchase price of qualifying business-related equipment from its taxable income within the year it is purchased.

What you may not know is that the deduction limit increased this year to $1.05 million on purchases up to $2.62 million. Qualifying equipment must be used for business purposes and can be purchased new or used.

What makes the deduction so attractive is that it significantly lowers the true cost of equipment a business needed anyway. It’s essentially an investment in you, by you.

From Section179.org:

“In years past, when your business bought qualifying equipment, it typically wrote it off a little at a time through depreciation. In other words, if your company spends $50,000 on a machine, it gets to write off (say) $10,000 a year for five years (these numbers are only meant to give you an example).

“Now, while it’s true that this is better than no write-off at all, most business owners would really prefer to write off the entire equipment purchase price for the year they buy it.

“And that’s exactly what Section 179 does – it allows your business to write off the entire purchase price of qualifying equipment for the current tax year.

“This has made a big difference for many companies (and the economy in general.) Businesses have used Section 179 to purchase needed equipment right now, instead of waiting. For most small businesses, the entire cost of qualifying equipment can be written-off on the 2021 tax return (up to $1,050,000).”

The site has a Section 179 calculator, which will enable you to estimate your savings.**

It’s important to note that qualifying purchases must be completed, financed and put into service by the end of 2021.

Generating Income Through Sales Of Used Equipment: The well-reported supply line issues have caused strong buyer demand across many sectors, which is driving up prices on used equipment. Add in buyers wanting to take advantage of the aforementioned tax breaks and the result is a heavy seller’s market.

And we’ve seen that seller’s market firsthand! Here at Capital Online Auctions, we are experiencing high bidder registration numbers, high web traffic, and robust selling prices across all auction categories. We are happy to help you get your used equipment posted before 2022 is here! Contact us here.

**NOTE: Capital Online Auctions is not a tax advisor, please consult your tax professional to find out how your business may benefit from the Section 179 deduction.

Ghost Kitchens: Changing the Landscape of the Restaurant Industry

 
The restaurant industry has been especially hard-hit by the COVID-19 pandemic. Practically overnight, restaurateurs had to shift to online ordering and curbside pickup or delivery to stay afloat.
 
Businesses without the infrastructure to pivot quickly struggled. But for brands utilizing a ghost kitchen model, the “new normal” was simply business as usual. With their already-established online identities and distribution capabilities, ghost kitchens – commercial kitchens that prepare restaurant-quality meals exclusively for delivery or pickup – were uniquely positioned to seamlessly continue operations.
 
According to restaurant management company Upserve, from February-April 2020, restaurants saw an 840 percent increase in weekly online ordering sales. Over the same period, restaurants in large suburbs experienced an incredible 3868 percent growth in online ordering.
 
Part of a trend that actually started well before the pandemic, ghost kitchens (sometimes also called virtual kitchens, cloud kitchens, shared kitchens and shadow kitchens) originally catered to a generation of consumers in search of a variety of prepared cuisines quickly delivered to their doorsteps.
 
But with Americans of all ages home-bound for the last several months, that demographic has widened significantly. Upserve reported that through mid-June, 60 percent of American consumers say they order online delivery or takeout meals at least once a week.
 
So what’s unique about the ghost kitchen model? Ghost kitchens exist purely in a virtual world. The virtual restaurant brand(s) they are attached to have no physical brick-and-mortar building for sit-down dining.
 
Customers view menus and place orders online. Meals are then prepared by culinary staff and dispatched quickly to doorsteps, either by in-house delivery staff or through established third-party services such as GrubHub, DoorDash, Postmates or Uber Eats.
 
“Why are ghost kitchens becoming so popular? The simple answer is because food delivery is exploding,” writes the Roaming Hunger blog in its 2020 Guide To Ghost Kitchens. “The simple answer is because food delivery is exploding. With the growth comes PR, chefs jumping in to get ahead of the curve, and investors who want to take advantage of the trend. To explain further, ghost kitchens are a bet that the future of food lies in delivery.”
 
Low overhead costs are one of the draws of the ghost kitchen model for investors, which is viewed by some as an affordable and less-risky option for entrepreneurs seeking entry into the restaurant industry. By eliminating dine-in seating, these businesses are able to slash their operating costs dramatically. They can be set up in out-of-the-way, less visible and less expensive rental spaces. Expenses such as furniture, décor, serveware, and printed materials are eliminated.
 
“One estimate we heard was that a brick-and-mortar restaurant in New York City costs $1 million to $1.5 million to set up, while a cloud kitchen can get up and running for $100,000,” wrote Lena Ye and Geoffrey Jones for Harvard Business School’s Working Knowledge.
 
There’s also no need for servers, bartenders or hosts, which reduces staffing costs significantly. Ghost kitchens employ chefs, and in some cases delivery staff, but little more is often necessary.
 
Chefs may be trained to cook from multiple menus, meaning that a variety of restaurant brands can operate out of the same facility.
 
And the ghost kitchen set up gives restaurants the flexibility to easily experiment with seasonal menu items. Changes can be made quickly online because physical menus don’t need to be reprinted.
 
With COVID-19 cases currently climbing in the US, and social distancing measures continuing for the foreseeable future in most parts of the country, the ghost kitchen model enables home-bound patrons to still enjoy restaurant-quality meals safely without taking on the risks of indoor dining.
 
And with consumers of all ages experiencing the convenience of high-quality restaurant-meal delivery, it isn’t difficult to envision these new customers sticking around on the other side of the pandemic.
 
“We’ve used it to deliver food to friends and family who couldn’t go out for pickup,” said Sandra Dawson, a Montgomery County, MD resident who began using GrubHub during the COVID-19 pandemic. “We use it for us when we’re in a time crunch for the ease of taking off an errand on our to-do list. When life starts to return to normal, it will continue to be a service we’ll frequently rely on.”