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Snatch tax victory from defeat

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in Small Business Tax,Small Business Tax Deduction Strategies

Sometimes, you just can’t avoid the last-quarter tax trap for business assets. Equipment breaks down and you need to replace it.

Strategy: Use the expensing deduction to bail yourself out. Under Section 179 of the tax code, you can deduct—or expense—up to $108,000 of the cost of qualified assets placed in service in 2006, regardless of how late in the year you add them.

The costs expensed under Section 179 are removed from the quarterly calculation. Therefore, you can benefit from faster writeoffs while you bring your last-quarter purchases below the 40 percent limit.

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