Maximize Write-Offs

Intro:

In the world of tax strategy, when you do something is just as important as what you do. One of the most effective—but underused—methods of reducing taxable income is accelerating your deductions in high-income years. Yet many business owners fail to take advantage of this simple concept.

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The Concept:

Accelerating deductions means pulling forward legitimate business expenses into the current tax year. This can include equipment purchases, prepaying rent or insurance, or maxing out contributions to retirement plans. The goal is to reduce taxable income now, when your tax rate is likely higher.

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When It Matters:

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This tactic is especially powerful when:

• You’ve had an unusually high-income year.

• You expect your income to drop in the coming year.

• You’re on a cash-basis accounting method (which most small businesses are).

• You want to stay below certain income thresholds that trigger surtaxes or phaseouts of deductions.

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Real-World Examples:

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• Buying a $30,000 truck before year-end could create a large Section 179 deduction—lowering your tax bill significantly.

• Prepaying a year’s worth of business insurance may free up cash flow next year and provide an immediate write-off now.

• Making a last-minute solo 401(k) contribution could reduce both personal and business tax liabilities.

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The Strategic Layer:

This isn’t about random spending to chase deductions. A skilled tax strategist aligns these moves with your cash flow, long-term goals, and IRS compliance. When done right, timing your expenses can be a powerful lever that keeps more money in your pocket—right when you need it most.

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Take Action:

If your income has changed, or if you haven’t revisited your entity structure in the last 2–3 years, it’s time for a strategic review and stop giving the IRS more than you legally owe.