millionaires and billionaires

Thanks for the responses, I have a better understanding of the business advantage and preferences now. I still maintain that the net effect on revenue collected by the IRS is nil (over time), so it really isn't a loophole, just an acceleration in time of expense deductions, and maybe stimulative to boost the economy short term.

Thanks again.

Nobody that matters wrote:

LOL wrote: Yes I see the time cost to money argument. So it seems to me you should deduct the expense as you pay for it, not over the useful life of the item. But still in the end, it should average out over time and the IRS collects the same net amount of tax. Tax on revenues-expenses. WTF

So I still don't see where the loop hole is on accelerating depreciation. Ughh

Taxes are paid on profits. Expenses reduce profits. Accelerated depreciation increases expenses.

It really is just that simple. Don't try to justify it long term. It's a short term tax reduction. That's one of the many problems with many businesses - they're stuck in short term thinking.

Very clear explanation. Thank you.

Like anything else you get what you pay for. I wouldn't consider starting a company w/o consult with a good attorney. Notice I said good attorney. If you have ever tried to read the statutes in Colorado for Corp there is a lot to consider. The legal ramifications with such a litigious society can be overwhelming. But that's assuming you are profitable. And I have never had a problem deducting them in the year incurred.

As for accelerated depreciation, we always opt for it when it is available. Greater deductions means less taxes - usually. But we also factor into account how long the item will last and generally know that we will be needing to replace it sooner because of high use.

A good accountant is a good ideas as well and his/her services are usually deductible.