Tax Benefits of Purchasing Before the End of the Year

Photo courtesy Joanne Kimes, Kelly’s Affordable Portables

Every portable restroom operator loves a profitable year, but few welcome the tax burden that accompanies it. As PROs stay busy in the mad dash of the final quarter, sitting down to hash out Uncle Sam’s share isn’t at the top of most minds. But it should be.

Actions you take before midnight on December 31st impact your tax liabilities. While an accountant or tax advisor can assess your situation, this article explores the tax benefits of purchasing before the end of the year and the significance of the Section 179 tax deduction.

Understanding Tax Benefits for PROs

Estimating your tax liabilities and making strategic purchases in the final months of the year can benefit your business. This statement applies to PROs who had an excellent year and can afford to buy new portable restroom equipment outright. It also pertains to those falling short on an upcoming tax bill.

Purchasing that luxury trailer you’ve had your eye on and putting it into service this year lowers your tax liability. You get the deduction now, whereas if you wait until January 1st, you’re essentially “loaning” the government interest-free cash. Money spent on portable toilets, year-end supplies, and other equipment reduces taxable profit, meaning you pay less in taxes.

You can benefit from year-end purchases if you’re short on a tax payment and need to reduce your liabilities. Section 179 lets you finance eligible equipment and deduct 100% of the amount the year you put it into service. Financing a large purchase could reduce taxes owed, allowing you to stay in good standing with the IRS. However, this approach requires a hard look at next year’s forecasted income and reassurance that you can afford the monthly payments and realize a return on your investment.

Section 179 Tax Deduction: Dollar-for-Dollar Reduction

The Tax Cuts and Jobs Act made U.S. Section 179 of the IRS Tax Code permanent. Each year, you can deduct the total purchase price of qualifying equipment as long as you have taxable income. This tax benefit applies to sole proprietors, LLCs, partnerships, and corporations. The savings are substantial since the 179 deduction decreases your taxable income dollar for dollar.

In 2024, the maximum tax deduction is $1,220,000, plus a 60% bonus depreciation allowance for the first year. If you don’t make enough money to take the full deduction, you might be able to save the unused portion for next year.

Prioritizing Year-End Purchases

With the Section 179 tax deduction, your company can make or finance big purchases. Use the tax code to your benefit by evaluating your assets and taxes owed to set your budget.

Consider these eligible business purchases:

• Portable toilets, sinks, and accessories
• Fire protection or security and alarm systems
• Office furniture
• Portable restroom trailers
• Real property improvements, including HVAC and roofs
• Computers, in-truck devices, or driver hardware
• Shower trailers
• Pumper trucks and vehicles used over 50% of the time for business

Invest In Your Business Before the Year Ends

Upgrading your portable restroom equipment before December 31st is an effective financial strategy with tax benefits. But buying assets that improve next year’s outcome is an operational blueprint for success.

Looking to Take Your Portable Restroom Business to the NEXT LEVEL? Download our FREE Guide: “Your Guide to Operating A Portable Restroom Business.”

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