What is the advantage of writing equipment off?

Discussion in 'Business Operations' started by grassman50, Sep 25, 2001.

  1. Sometimes you're going to want to take a full write-off, other times, you're wanting to take it over a couple of years. Get a good accountant. Somebody that you can trust completly. Then between the two of you, figure out what's best for you. At least the first few years.

    John
     
  2. eslawns

    eslawns LawnSite Senior Member
    Posts: 712

    I usually take my loans out for specific pieces of equipment. Why borrow more than I need?

    If you don't have a negative cash flow in slow months, you probably shouldn't. Some people do this to help with payroll in the winter. Another way to go would be a line of credit. If you need the cash, it's there.


    grassman50:

    I recommend that you take a couple of business courses at your local community college, and make an appointment to see a CPA. This may save you some grief if you are ever audited, and a lot of money if you aren't.
     
  3. crew

    crew LawnSite Member
    Posts: 163

    Simple example:
    You sell $40,000 worth of work this year. if you claim no expenses of any kind, you will pay taxes for $40,000 of income.

    You sell 40,000 worth of work this year. If you bought $20,000 woth of equpment, you pay taxes on only $20,000 because the $20,000 in equipment is part of what it cost you to sell $40,000 worth of buisness.

    i suspect you are not paying your taxes or you would khave some incling of what expenses are. eslawns is right - take a class,or raed a book or get an accountant and go legit!
     
  4. John Allin

    John Allin LawnSite Bronze Member
    Posts: 1,489

    If you buy $20k of equipment, you can't write off $20k in the same year. It'll take a few years to write it all off.

    But.... you still should do it to be legit.
     
  5. crew

    crew LawnSite Member
    Posts: 163

    I thought 20,000 was the max you could expense in 1 year. ??
     

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