This will be a big deal for most of us who bought a lot of equipment or property this year.

[dealtimeman]

especially with a lot of the guys buying new rigs lately.

http://www.bizjournals.com/bizjourn...iness-will-benefit-from-congress-tax-and.html

 

[Mikey P]

cool..


I'll be showing no profit for years.

 

[Scott S.]

Sweet!

 

[D Luke]

All in all I don't think Sec 179 is good for small service businesses.

Good luck getting any small business owners to realize that, though.

 

[dealtimeman]

Derek, elaborate your position please.

I stressed out last year untill they passed the extension.

Why do you think it is bad if you are buying new equipment whether that is Truckmounts, vans or cars every year, why is this bad. I know what our plan is and will opt to deduct that year knowing next year I will be buying a lot more.

I think it has to do with how you work your own financial system, but a lot of cpas still want you to depreciate through years but we haven't done it that way and it seems to be working well for us, we'll untill we stop buying and upgrading Equipment that is.

What is especially good is that all large vehicles >600o but <14000 pounds is an immediately expencable 25 grand. Like I said a big deal.

 

[Scott S.]

any time the gov gives anything back, is a good thing.

 

[jcooper]

I agree W/Mike.

Being able to deduct a 30k tm off our income all at once, should lower ones tax bill quite a bit.

 

[D Luke]

You can never make blanket statements when it comes to taxes because there are just so many variables. But, it basically comes down to your marginal tax rate now and in the future.

By small I mean 1 or 2 truck guys. There is just not enough of a need to be continually buying high dollar equipment after a while.

So, by taking the 179 deduction you only come out ahead if your income goes down (shouldn't in our industry unless you're doing something wrong) or tax rates go down (not likely imo). Or I guess if you plan on adopting 14 kids next year.

It bums me out to see the manufacturers advertising 179 as a major discount on a new truckmount when really, for owner ops at least, you're just saving the tax this year to pay it at a higher rate next year.

 

[dealtimeman]

From what I have read about the agreed to legislation is that the 179 rules are now a set part of the tax code for the foreseeable future without need of extension from year to year.

Also it is only up to 500000 expense limit, so it is not really a huge deal for large multimillion dollar corporations, it is more for the small guys.

When it comes to cash flow and paying taxes, I plan for the now (that year) as promises from our government rarely come through.

 

[Chris A]

I've been watching this since I ordered my truck. Glad to see it went through

 

[J Scott W]

Agree that it is not always wise to take all the depreciation decution up front. The taxpayer always has the option to use section 179 for accelerated depreciation or not use it. It allows hime flexibility.

Also to be considered is the value of having the money now versus having that same money in the future. The cash can be used for investing (as was invisioned by the original rule) or other opportunities. If one's marginal tax rate stays trhe same, it simply allows the taxpayer to get their money a year (or a few years) sooner.

 

[davegillfishing]

sweet...we spent just a touch over 100k in new equipment this year

 

[Mike Draper]

I spoke with my accountant on this subject today. Anything I can do to pay less taxes is great. Our government was never intended to take 50% of everything we earn.

 

[A.J.]

cool..


I'll be showing no profit for years.

Brig on the medicaid lol

 

[Askal]

So you buy new equipment for 100,000. You get a loan for 5% to do so. Next year you make your payments on that equipment from taxable earnings at a 5% higher tax rate. Now you are paying 10% more. We try to buy all new stuff out of profits and take the 179 option. If it is financed we take an annual deduction. Debt service is the downfall of many business'. Learned the hard way. Not for everyone I am sure but works great for us.

 

[rjwood]

So you buy new equipment for 100,000. You get a loan for 5% to do so. Next year you make your payments on that equipment from taxable earnings at a 5% higher tax rate. Now you are paying 10% more. We try to buy all new stuff out of profits and take the 179 option. If it is financed we take an annual deduction. Debt service is the downfall of many business'. Learned the hard way. Not for everyone I am sure but works great for us.

That's pretty much how I operate as well.

 

[dealtimeman]

used equipment that is "new" to your business quakifies for section 179 expense as well.

Most people don't know this!

 

[GeneMiller]

The best thing you can do for your business is buy what you need to be successful. Don't worry about what the government might or might not do. Let you account handle that.

 

[FB19087]

Please keep this thread about Section 179

Moved political tangent here:
http://mikeysboard.com/threads/tang...ot-of-equipment-or-property-this-year.281230/

 

[rick imby]

Sorry about that Fred, I was thinking this would be a better conversation done in Pms...

 

[Kevin B]

For a company that intends to grow, the 179 is an option. Last year we bought a new van, and a new truckmount. We adjusted our income to the perfect tax table mark using a combination of the 179 and traditional depreciation. This year and years after we are still depreciating the machine because its likely the truck will endure two machine installs. Essentially the 179 helped me pay for part of that machine the first year. Enter 2015. We had 70ish% growth, and did not accomodate with tax planning due to the cash flow pains of growing. About October, we realized it was going to be a huge issue. We went to our accountant and expressed to him we would need to buy another machine to handle production but needed to know if a 179 in 15 or waiting to 16 was best. He came back and said now was going to be a huge tax difference. So, next year it will be a centrifuge, rug plant, and then the year after full on restoration expansion. Then duct cleaning...im not sure how a growing company would never at least consider the options of a 179 with their CPA

 

[dealtimeman]

Been telling people growing is achieved easier when your tax burden is quantifiably minimized.

We almost always expense now as we know we will buy more later in the attempt of growing/ being better equipped to handle any job scenario most efficiently.

 

[Kevin B]

Been telling people growing is achieved easier when your tax burden is quantifiably minimized.

We almost always expense now as we know we will buy more later in the attempt of growing/ being better equipped to handle any job scenario most efficiently.

Indeed