Should I buy equipment and other fixed assets to save on taxesbefore year end?

As we approach the end of the year, it’s crucial to evaluate how we canmaximize our tax savings. One of the most impactful strategies is theacquisition of equipment, machinery, and other fixed assets. By placing theseassets in service by December 31, we can leverage significant tax deductions.Here’s a closer look at a few key opportunities worth our consideration.

An immediate deduction of up to $1.22 million for qualifying tangible propertyand certain computer software purchased and pconsilaced in service in 2024. Bear inmind, however, that this deduction phases out on a dollar-for-dollar basis whenexpenditures exceed $3.05 million for the year. Therefore, timing our purchasesstrategically is essential.

A real time expensing of certain low-cost items, even those typicallyclassified as fixed assets. If your business has applicable financialstatements, you can deduct up to $5,000 per purchase or invoice for theseitems, provided you also deduct them for accounting purposes.

For businesseswithout applicable financial statements, the limit is $2,500. This means that,for example, if I purchase 10 computers for my business at $2,500 each, I coulddeduct as much as $25,000 up front.

Each of these options presents unique advantages and challenges, along withspecific rules and limitations. It’s wise to evaluate which strategies can bestmeet our business needs. If you need guidance in navigating these tax-savingopportunities, do not hesitate to reach out to our office for tailored advice.Let’s work together to maximize our savings before the year concludes.