Spend Money on Equipment Before Tax Time
Tax season’s right around the corner. Gather all those statements and receipts as you begin working with accountants to determine if it’s better to claim everything as income or invest to grow the company and lower your tax burden. Certainly, a few of the many things to consider should be the age of your equipment, labor shortages, and product availability.
Material shortages might be making this the perfect time to diversify your business. For example, if you only offer spray foam, it may be the perfect time to add services like fiberglass, blower doors, etc. New offerings give your team more to sell and create additional business with your existing customers.
Labor shortages can also be a big driver for new equipment. If you’re struggling to find people or add crews, why not make your current employees faster and more efficient? Better equipment helps them complete more jobs and brings more revenue into your company. Great equipment can also be a lot less frustrating. Have you ever had someone poached by a company that had nicer rigs? Even beyond pay and benefits, it’s one more way to keep good employees from looking at greener pastures with your competition. This may be the perfect time to upgrade your blow machine or spray foam rig. Maybe it’s getting a new truck or tools that help your crews be more efficient.
Whatever your reason is for upgrading or diversifying, if those reasons are tax-based, be sure to talk with your accountant or tax professional. Depending on your specific qualifications they may be able to help you take advantage of section 179 of the IRS Code which allows a depreciation deduction for certain assets (capital expenditures) in one year, rather than depreciating them over a longer period of time. You may also want to talk with them about or consider financing. Financing equipment may dramatically lower your initial investment while preserving and maximizing cash flow. Lastly, there may also be an option for 90 days of deferred payments, meaning you could take advantage of any potential tax benefits and pay nothing until 2022! So work with your tax professional to determine what’s best for you. If new tools or equipment are in the plan, reach out to IDI and we will help you make it happen.
For more information on new equipment or any of the products we carry, reach out to your local branch or any of us at the corporate office where we look forward to earning your business and helping you grow every day.