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Old 12-07-2012, 10:43 AM
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White Gardens White Gardens is offline
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Join Date: May 2008
Location: Bloomington IL
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To me, any accountant advising you to spend money to avoid taxes is steering you in the wrong direction.

For one, you have to have the money first to buy the equipment. If that takes away from your day to day living expenses, then what are you going to live on.

Equipment also depreciates, you never get your money back on something that depreciates.

If you go to sell your business or equipment, then you end up paying capitol gains tax. So avoiding taxes at point A doesn't mean you won't have to pay taxes at point B.

Spending 20k to avoid paying 3k in taxes seems like a bad numbers evaluation. If you have 17k left over after taxes, invest it somewhere where you will make the 3k back.

Lots of investments also give you a tax break or deduction also.

Everyone business owner that told me I should buy equipment or spend money on stuff to avoid taxes was pretty much broke. Never could I figure that one out.

That and the farming community I grew up in pointed it out to me. Farmers would spend 200k plus on equipment to keep from paying taxes and always complained of being broke.



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2005- Completion of University of Illinois Master Gardner's Program.
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