End of Year Spending Ideas for Construction Business Owners

Tips & Advice

The end of the fiscal year is approaching, and now might be a great time to make some last-minute investments to reduce what you owe the IRS for taxes this year. Luckily, the amount you can deduct for certain expenses has gone up in the past few years, and now you can deduct some additional purchases that you may not have been able to in the past, due in large part to Section 179 of the IRS Code.

Equipment

Investing in equipment now, before the year ends, could save you quite a bit in taxes from 2019. In most cases, you’re allowed to a federal tax deduction of up to $1.02 million on equipment and machinery you purchase before the new tax year starts in January. Both new and used equipment and machinery qualify for this deduction. This is a great option for any business owner that wants to update their fleet while simultaneously reducing taxes.

According to Section179.org, Section 179 could cover the entire cost of 2019 equipment purchases for most small businesses. Additionally, most medium-sized businesses could greatly benefit as well.

There are specific guidelines outlined by the IRS to follow when financing a piece of equipment.

Separately from Section 179, Bonus Depreciation on equipment must also be considered. As long as equipment is “new to you” (meaning new or used), bonus depreciation can apply. According to Section179.org, Bonus Depreciation is extremely useful to large businesses spending over $2.5 million on equipment.

Business vehicles

You can deduct the full cost of any vehicles you purchase that weigh over 6,000 pounds on this year’s return. This is because you can take a full depreciation deduction for them under Section 179 of the IRS Code. The vehicle section of Section 179 has been reduced in previous years, but can still save you a chunk of money in 2019.

Per Section 179, the equipment and vehicles must be used for business more than 50% of the time to qualify.

Please consult an accountant for definitive guidelines before making a purchase.

Business personal property

This is something else you can deduct under Section 179. Business personal property includes anything and everything that is not physically attached to your facilities or buildings. Common items that businesses purchase to benefit from this include computers, software, and office furniture. This year, you can deduct up to $1-million of your business personal property expenses. Now might be a great time to buy new computers for the employees in your office, especially if the computers they’re currently using are on their last legs or are negatively impacting their productivity because of their speed.

Listed property

This is property you use at least 50% of the time for business, and you can get a deduction for its cost. Listed property includes passenger vehicles that weigh under 6,000 pounds, small boats that you use both personally and for business, and digital cameras and recording equipment. Be aware that the IRS does expect you to prove that you use listed property for your business at least half of the time.

Building improvements

You can deduct any costs associated with improvements you make to your company’s buildings. Improvements can include security systems, fire safety additions, roofing, and HVAC systems. Why wait to make these improvements if you can get a cut for them from the IRS when it’s time to shell out your taxes for the year?

A good accountant

A qualified and experienced accountant can save you a big chunk of change when you pay your taxes for the year. They know the loopholes, cuts, and deductions that apply to you, and they can help you avoid paying an unnecessary amount simply because you weren’t aware of all of the tax benefits available to you. As a construction company, ensuring that your company is using the Section 179 Deduction to the company’s best benefit is very important. Investing in a good accountant now, before the year ends, could save you quite a bit when you have to pay your taxes in the spring, and it could save you quite a bit in the years to come.

READY TO GO SHOPPING?

If you’re looking to take advantage of Section 179’s equipment and vehicle deductions, Eiffel Trading’s online marketplace has an extremely wide variety of used heavy civil construction equipment, used marine equipment, and used vehicles for sale. Here are a few of our most popular categories:

All of our listings are constantly being updated, but if you don’t see what you’re looking for, create a wanted listing for free.

Ready to sell your used heavy equipment or construction material? List your products today for free on Eiffel Trading’s online marketplace.

If you have any questions or would like additional information, please call us at 1-800-541-7998 or email sales@eiffeltrading.com.