Last chance for bonus depreciation…

Last chance for bonus depreciation…

Mega tax savings can be had with the bonus depreciation provision for most types of property.

What does this mean? 

Generally real property (office furniture, computer equipment, vehicles, etc.) last longer than a year and therefore such assets must be capitalized and depreciated over time.

The depreciable life of certain asset classes varies and is defined by the IRS (IRS Publication 946 found here: 

For example, computers are generally a 5-year depreciable life asset while furniture is a 7 year asset.

Bonus depreciation allows you to FULLY write off that asset in the first year of that asset’s life.

Bonus depreciation is allowed for assets acquired and placed in service after September 27, 2017 and before January 1, 2023 for most assets.

So, in plain English, you can write off 100% of qualified assets in the year you acquire and put that asset into service for your business. 

There is a provision called the 179 election that allows you to do the same, but the key difference is that the Bonus Depreciation provision has NO limitation for Federal tax law while the 179 election has a ceiling. 

The tax planning opportunity is that you can fully expense most equipment and drastically reduce your taxable income.

Before you go on a wild shopping spree, I will bring up the advice of my wise father. 

Growing up, my dad always told me “Never base a decision solely based on the tax consequences.”  

Over my career, I’ve encountered many people who told me when we started the tax strategy and planning process “Chris, don’t tell me to go buy more crap… I don’t need any more equipment, machinery, vehicles, etc.” 

These folks had taken advantage of either the bonus depreciation or 179 election provision already and bought all the equipment and “things” that their businesses needed.

And whoever their tax advisor was didn’t have any other tricks in their bag of tools to give them outside of “buy more stuff.”

My stance is that you should do what makes the most business sense.

If you NEED a piece of equipment, machinery, etc for your business to level your business up in efficiency and productivity, then by all means, this is a phenomenal tax strategy.

But don’t go out of your way to spend money on things that you don’t necessarily need just for the tax benefits.

Simply stated, there are other avenues of tax reduction strategies that can save you significant tax dollars outside of the standard “buy more stuff and capture the accelerated depreciation”.

You see, the government has a system to take your money through the tax code.

And most CPA’s and accountants are so busy preparing taxes and helping their client stay compliant with tax law that they simply miss the opportunities that there are to save serious tax dollars.

That is because they are lacking the time and energy to track those tax strategies down and then communicate those to you. 

That is where Tax Reduction University fills the gap. The TRU Tax Strategy System is the missing link between remaining captive to the government's system of oppressive taxation and finally declaring freedom from large tax bills forever



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The TRU Method Of Choosing A Financial Advisor


Financial Planning Ties In With Tax Planning To Achieve Tax Savings Now And In The Future.


Here Are Some Key Questions And Considerations When Choosing A Financial Advisor:


  1. Understand What Licenses The Advisor Holds And What Those Licenses Enable Them To Do For You
  • Some Solutions Require Certain Education And Legal Licensing. Knowing If The Advisor Has Limitations On What They Can Provide Is Vital.


  1. Understand If The Advisor Is A Fiduciary
  • In Essence A Fiduciary Must Place Your Needs And Interests Ahead Of Their Own And Act In Your Best Interest. 


  1. Understand The Role The Advisor Will Play In Your Financial And Tax Planning

- How Often Will They Meet With You And What Is The Purpose And Agenda Of Those Meetings?


  1. Understand How, When, And By Whom The Advisor Gets Paid For Their Time, Energy, And Effort
  • We All Have A Right To Earn A Living And We All Have A Right To Have Transparency Around What We Pay For Services.


  1. Understand If The Financial Advisor Is Captive To Their Firm Or Broker Dealer
  • Is The Advisor Only Able To Provide Solutions Provided By Their Firm (Captive) Or Are They Able To Meet Your Needs With Tools From A Variety Of Sources (Independent)?


TRU Recommends Working With A Certified Financial Planner (CFP). 

These Are Professionals Who Should Value Comprehensive Planning And Be Able To Integrate Tax Planning As Part Of The Value That They Provide.



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