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Purchasing Assets - Timing Is Everything
Acquire Depreciable Assets Before Year End
For most purchases of depreciable assets such as equipment, only 1/2 of the amount normally allowed for a deduction for income tax is deductible in the year of purchase. This means that purchases early in your taxation year will get the same deduction as if purchased later on in the year.
Deferring purchasing these types of assets until just before your current year-end not only helps with your cash flow but also gets the same tax deduction as if you purchased the asset at the beginning of the tax year.
Pre-purchasing these assets needed for your next year-end just before the end of your current year-end hurts a bit on your cash flow, but accelerates the tax deduction. If you have spare cash flow, pre-purchasing assets you will need in the next year accelerates the tax deduction on those assets.
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