Let’s talk about the time value of money—one of the most important principles in tax planning.
If you’re going to spend $1,000 on your business, here’s the question:
Do you want the tax deduction today, or a year from now?
Assuming your tax bracket stays the same, the correct answer is today every single time.
Why?
Because a deduction today is like receiving an interest-free loan from the IRS. You’re reducing this year’s tax bill, keeping more cash in your pocket now, and putting that money to work sooner.
Now, there is an exception:
If you know you’ll be in a higher tax bracket next year, you may intentionally push that deduction forward for a bigger benefit. But for most people, and in most years, a deduction today beats a deduction tomorrow.
If you’re spending the money anyway, take the write-off now—not later.
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