October marks the start of the 4th quarter and the beginning of the end of the tax year for many business owners. If you’ve been considering making purchases for your business, this might be the right time to buy. Your business benefits from having the goods or services available now, and your expense write offs can reduce your tax liability for this year.
Having worked with businesses since 2009 to provide equipment financing in several industries, here are our recommendations for smart end-of-the-year business buys.
If you’re considering buying or lease financing a commercial vehicle, now’s a good time to sign on the dotted line for a couple of reasons. Year-end sales get underway. Dealers are anxious to make room on their lots for new vehicles, and they tend to heavily discount their vehicles to meet annual sales goals. If you’re able to negotiable the purchase or lease price down further, the deal gets better, especially if you’re purchasing or lease financing multiple commercial vehicles.
Lease financing before the end of the year provides certain tax advantages. What those advantages are depends on whether you choose a capital or an operating lease. You can write off the vehicle’s depreciation under a capital lease. You can treat lease payments as an operating expense under an operating lease.
It is possible that you can write off business equipment, like a forklift, buncher feller, boom trucks and tank trucks, to name a few. Again, the tax advantage depends on the type of lease you choose, operating or capital. Either way, lease financing new or additional equipment can help you improve and expand your business operations so that next year could be the best year yet for your business.
Heavy equipment dealers often share the same mindset as vehicle dealers in that they want to meet annual sales goals and make room for new equipment. From now through the end of December, you can find great deals on equipment. Get a head start by filling out a credit application for your lease financing and check our equipment for sale.
Car or Truck
It’s common for smaller businesses owners to purchase a car or truck to use for both business and personal reasons. The same logic applies as to why the end of the year is a good time to buy or lease finance a car or truck. Check with your tax consultant as to the advantages and strategies to reduce your tax liability when using a personal car for business.
Professional Consulting/Advisory Services
This of all years has been one of massive changes. To best navigate these twists and turns while positioning their business for the future, company owners are seeking professional counsel in a multitude of areas, like sales and marketing, communications, technology, human resources, legal issues and taxes. Joining an executive coaching group or community chamber is an alternative to connect with and learn from others facing similar situations.
Not only can professional consulting or advisory rates and membership fees be written off your taxes, but the advice and guidance gained from participating can help you run and grow business.
Employee Training & Continuing Education
Investing in training and continuing education for your employees at the end of the tax year makes a lot of sense for many business owners, especially if 4th quarter is a traditionally slow period in your industry. Better trained employees can only make your business stronger and put you ahead of competition, not to mention help start off the new year in a better position to improve job performance.
The costs associated with additional training and continuing education for your employees can be deducted from your taxes as long as the education applies to the employees’ position. Meaning, you can write off safety training for heavy equipment operators, but you couldn’t write off training them as IT technicians unless it directly applies to their job description. There are educational opportunities are available online and many are offered as a subscription, allowing employees to learn at their own pace.
These are just a few smart buys that improves your business and can lower your taxes. There, of course, are others, but in terms of “moving the sales needle,” these can’t be beat based on our experience working with business owners to finance equipment.