Buying a $100,000 piece of equipment? You’ve got three different tax strategies—and choosing the wrong one can cost you thousands.
Here’s the breakdown:
1. Standard Depreciation
5-year property = $20K per year in write-offs. Slow and steady.
2. Section 179 Deduction
You can write off up to your business income.
Example: If your profit is $50K, you can use $50K of Section 179 now, then depreciate the remaining $50K over 5 years ($10K/yr).
Why limit the write-off?
Because sometimes taking too much deduction now hurts you later.
If you’re in a low tax bracket this year and expect to be in a higher bracket next year, spreading out the remaining depreciation can save you more long-term.
3. Why you don’t always want to zero out income
Some people try to take the full deduction immediately—even if they’re in the lowest bracket. But if next year you’ll be making more money and sitting in a higher bracket, those future depreciation deductions could be worth far more.
This is why year-end planning matters.
It’s not just about taking the biggest write-off—it’s about taking it at the right time.
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