Year-End Equipment Buying: The Tax Timing Play

Every fourth quarter, savvy business owners look at their equipment needs and their tax bill together. The reason: deductions like Section 179 and bonus depreciation apply in the year equipment is placed in service.

Placed in service — not just purchased

To claim the deduction this year, the equipment generally must be delivered and operational by year-end, not merely ordered. Financing helps here: you can acquire before the deadline without a large cash outlay.

Plan the purchase, not just the equipment

Coordinating an equipment purchase with your tax strategy can produce a deduction that offsets a big chunk of the cost — sometimes in the same year you start earning from the asset.

Deadlines and eligibility change. Verify current-year timing rules with your tax professional.