Is there real value in buying a piece of equipment for a tax deduction?

Ron's blue truck is older. Right now Scarlet is at 186,000 miles and replaced a truck with 190,000 miles that i turned over to a crew. That was a big mistake.
 
Scott Stone said:
Ron's blue truck is older. Right now Scarlet is at 186,000 miles and replaced a truck with 190,000 miles that i turned over to a crew. That was a big mistake.
Click to expand...

Scott your just like me, you don't drive a work truck. Fess up
Show them the Ferrari

Text me for info on Milwaukee event. 480-522-5227
 
yes I know. lol just bustin. funny, I was finishing a job the other day and was standing in the driveway of the customers house and turned around and walked into her hybrid car. thing was so quiet I didn't here her roll into the driveway.
 
Scott had great information in his post. One thing to keep in mind with all of your equipment is to think about how much money you are losing when it is down and you can not work. If you are repairing it several times a month it is now time to replace. I see guys every month come to the shop for repairs. Not only are they out for the repairs, they are not making any money. Think about how much you take in on an average day. When you put the numbers to it the decision to upgrade will be a no brainer. Back to the original topic. If thing are running well I would not buy new just for the sake of a tax deduction.
 
Last edited:
Steven Rowlett said:
Scott had great information in his post. One thing to keep in mind with all of your equipment is to think about how much money you are losing when it is down and you can not work. If you are repairing it several times a month it is now time to replace. I see guys every month come to the shop for repairs. Not only are they out for the repairs, they are not making any money. Think about how much you take in on an average day. When you put the numbers to it the decision to upgrade will be a no brainer. Back to the original topic. If thing are running well I would not buy new just for the sake o a tax deduction.
Click to expand...

Buy reliable machines and handle preventive Maint.
Down time is crucial , I replace tires and brakes at 50% for these reasons.

Pumps motors and other components will fail at certain hours. Rebuilding a pump once will only get you maybe half the life. After that they are not worth rebuilding.

Part exchange if your large enough is the way to maintain and prevent down time.

Don't let anyone tell you machines are all the same. That's a lie


Text me for info on Milwaukee event. 480-522-5227
 
Steven Rowlett said:
Scott had great information in his post. One thing to keep in mind with all of your equipment is to think about how much money you are losing when it is down and you can not work. If you are repairing it several times a month it is now time to replace. I see guys every month come to the shop for repairs. Not only are they out for the repairs, they are not making any money. Think about how much you take in on an average day. When you put the numbers to it the decision to upgrade will be a no brainer. Back to the original topic. If thing are running well I would not buy new just for the sake of a tax deduction.
Click to expand...

The way to take care of that is to always have spares.

There is virtually nothing that can shut us down. There is always a spare truck and skid waiting to jump into service. A total breakdown won't lose more than an hour.

I learned that years ago and was amazed when I went on sales with Ron. His sales guy showed up early at a demo with a nice shiny trailer but it had a water leak. Ron sent him back to get one that didn't leak and he was back 20 minutes later with the backup, right on time for the demo. Great minds think alike. Lol.

Sent from my DROID RAZR HD using Tapatalk
 
Backups are a great idea, working on some ideas for mine right now.
 
Tony Shelton said:
Check under the bed in the spare bedroom. Lol

Sent from my DROID RAZR HD using Tapatalk
Click to expand...

Just about everything but a spare hot water skid will fit there. hahahahaha
 
Johnson said:
Riddle me this:
Is it better to pay cash for a work vehicle or finance? Which one has better tax advantages?
Click to expand...

It would be your ultimate tax advantage to finance your truck and give all your profits to charity.

You would have zero tax liability.

But it wouldn't be too smart and you would soon go out of business.

I have one truck we have used for 5 years. Paid cash and have spent less than $6k on it that entire time including the purchase price, repairs and maintenance.

Contrast that with the diesel I had for five years that cost more than $60k in that length of time.

Both of them brought in the same amount of income in the same amount of time.

The cheaper truck leaves money in your pocket for backup equipment. It leaves advertising and travel budgets that allow for $15k summer trips to promote your company.

The new truck puts money in the pocket of the car manufacturer so he can pay the demands of the unions. It puts your money in the hands of the car dealership. It buys your insurance man's boat.

But you might save a little on taxes.

That is what the tax system is set up for. To direct your money to the people who donate to XXX political party.

Wouldn't it be better to use that money promoting your own business?



Sent from my DROID RAZR HD using Tapatalk
 
Tony, what if it was an option of buying a truck for $15k or financing it?
My financial investment advisor thinks I would get better tax rate financing as opposed to buying out right.
I think he's just saying that so I'll finance and take the difference and invest it with him lol.
 
You are better off with teh $15k truck, if you have time to shop for it, if you are confident in its reliability, and you have cash. Keep in mind that if you are buying a $30k truck, for cash, that its' nominal cost would be about $19500, after tax benefits, vs. $9500 for the used truck. There comes a time that you need to decide what the real cost of potential repairs is going to cost you.
 
You must log in or register to reply here.
Back
Top