When spending your hard earned money, timing is important. Small business purchases at the end of the year can be a great way to save through tax breaks or sales. It’s not too late to start saving money. The end of the calendar year is a great time to invest. Here are 5 end-of-year investments that could benefit your business.
1. Equipment
You can purchase equipment for your small business at the end of the year. If you have extra money in your budget, it’s better to invest that cash than to project.
Another reason to think about equipment when buying end-of-year items for small businesses is the ability to fully benefit from Section179 tax deductions. The Section 179 tax law allows businesses to deduct costs on vehicles, equipment and other purchases. The deduction is subject to many rules. Section 179 permits taxpayers to claim up to $1,08 million of equipment costs. Business owners can also claim 100% depreciation on the cost of their equipment. In 2023, Bonus depreciation will drop to 80%. Buying qualified items today can save money and maximize the value.
2. Major and Critical Expenses
Every small business owner knows what it’s like to have a big expense that is essential for the business but your budget can’t handle it. You can better predict your business funding needs at the end of each year.
Making larger purchases towards the end of the calendar year can also result in a higher tax deduction, as it reduces your taxable income. By increasing your annual expenditures before the end of the year, you can expect to see greater returns the following year.
3. Business Services, including Tech Subscriptions
When it comes to small business purchases at the end of the year, signing up for new business services such as cloud apps can be an excellent option. Tax-wise, you can usually deduct startup fees and other expenses. Many vendors offer specials near the end the year, as they strive to meet sales goals and other targets.
4. Vehicles
When the new model of a vehicle is released, the price often drops. As auto dealers try to move inventory in order to make room for new models, they often offer fantastic end-of-year offers. This is a good time to take advantage of tax advantages and get a great deal.
5. Technology Hardware
In the tech industry, end-of-year deals are not uncommon, especially those that relate to holidays. Tech equipment, from upgrading your computer to buying a new phone, is an ideal fit for small business end-of-year purchases. Section 179 can be used to deduct certain tech purchases. The deals that you can get at the end-of-year can save you a lot of money.
Financing for Small Business End-of-Year Purchases
You can only make end-of year small business purchases when you have cash in hand. Your tax advisor can help you determine the best financing option for your business. QuickBridge offers small, short-term loans to help you quickly get the capital that you need for strategic purchases. This will put you in a stronger position next year and keep your costs down.
This is not tax guidance. For more information, please consult your tax advisor.
