Daniel HonanFounder, Profitable Painter CPA PLLC · I help painting contractors increase profits & cash flow while reducing taxes♦ Bookkeeping ♦ Tax

Painting Biz Owners: Boost Your Tax Savings with Year-End Expense Acceleration! #TaxSavingStrategies

Name: Painting Biz Owners: Boost Your Tax Savings with Year-End Expense Acceleration! #TaxSavingStrategies
Uploaded: 2024-11-08T14:15:00+00:00
Duration: 52 s
Channel: Daniel Honan
Description: In this segment, the speaker explains a tax‑saving tactic called expense acceleration, aimed at painting contractors approaching the end of the fiscal…

8 Nov 2024 · 1 min

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In this segment, the speaker explains a tax‑saving tactic called expense acceleration, aimed at painting contractors approaching the end of the fiscal year. The idea is to purchase supplies needed for early‑next‑year jobs (e.g., January–March 2025) during the current year (October‑December 2024) so the cost can be deducted on the 2024 tax return. The speaker highlights that the purchases can be made on a vendor credit account such as Sherwin‑Williams, then paid off later using a business credit card, allowing the contractor to claim the deduction now while preserving cash flow until the following year. This approach leverages timing of expenses, vendor credit, and credit‑card financing to maximize tax savings without immediate cash outlay.

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expense acceleration. Basically, the whole idea is you're at the end of the year, let's say it's October, November, December, you're looking for ways to save on taxes. What you could do is look into the next year, so January, February, March of 2025, and say, what do I need that I can buy now and accelerate that expense? Meaning that purchase will be a tax deduction on 2024, this year's taxes, instead of waiting to buy it into the next year. You can actually use a credit card, you don't actually have to shell out cash, and still get the tax deduction for this year, which is useful. Maybe you have some job jobs that you've lined up for January, you know, you're going to need some supplies. Maybe you've already taken the deposit for those jobs. And so you could go put the materials on your Sherwin-Williams credit account and then pay the balance down when it's due on a business credit card so that you're getting the credit for the deduction, but you're not actually putting out any cash until the next year.