Our customers look to us for many ways to save money, primarily in income tax and financial issues. We realize that we are exposed to so many other money-savings ideas and we often fail to pass on some of these ideas. Although this idea may not fit everyone, it’s just an example that we’d like to share.
Because of the unusual features of Section 179, bonus and MACRS depreciation, most clients do not realize that there are excellent cash flow and income tax savings available just by timing asset purchases. For example, we have told some clients that large dollar assets should be purchased at the very end of the 3rd quarter so as to minimize the effect of the mid-quarter depreciation rule, maximize tax deductions and minimize cash flow effects. For the client who qualifies for bonus or Section 179, we tell them to wait until the last day of the year, since they get the same deduction. Conversely, we sometimes tell our clients to avoid asset purchases in the first 2 quarters of the year because the effect on cash flow is negative when compared to the tax benefit. Not all, but some customers can benefit from this guidance without any action or research