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MillerSearles

840 West Hamilton Street Suite 320, Allentown, PA 18101

 

Phone: 610-437-1000

Website: www.millersearles.com

January 2019

January 2019 Insights and Tips

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Depreciate Now Or Later

You will find a major new change for tax year 2018, allowing 100% depreciation of many big business expenses, including computers, tools, vehicles and other assets. This doesn’t mean, however, that you should take the full allowable deduction.


Offset 2018 Income
If 2018 was a very successful year and you also made a qualified large purchase last year, you can reduce your business’ taxable income by depreciating the asset 100% during the year of purchase, if you choose.


Offset Future Income
If, however, your business earns a predictable profit each year or you expect subpar profits in the near term, you might consider straightline depreciation, which depreciates an asset over its expected useful life. For example, if you buy a delivery vehicle you expect to swap out in five years, depreciate it 20% per year over that time. Talk to your tax professional to learn more.


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