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

Painting Business Owners: Harness quick depreciation tips to boost your financial gains.

Name: Painting Business Owners: Harness quick depreciation tips to boost your financial gains.
Uploaded: 2024-06-19T13:00:26+00:00
Duration: 57 s
Channel: Daniel Honan
Description: In this instructional segment, the speaker explains two key tax provisions that painting business owners can use to accelerate depreciation of capital…

19 Jun 2024 · 1 min

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In this instructional segment, the speaker explains two key tax provisions that painting business owners can use to accelerate depreciation of capital assets: Section 179, a long‑standing option that allows full expensing of qualifying equipment in the year of purchase, and the newer bonus depreciation, which expands on Section 179 but is temporary. The speaker outlines the bonus depreciation schedule, noting that it was 100% from 2018‑2022, then phases down to 80% in 2023, 40% in 2025, 20% in 2026, and is set to expire in 2027. A concrete example demonstrates how a $10,000 paint sprayer could be fully written off under these rules, illustrating the practical financial benefit for small painting businesses.

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We have things that can accelerate depreciation, namely Section 179 of the tax code, and more recently we have what's called bonus depreciation. These are provisions that allow us to either fully expense these capital assets in the year that they're purchased or expense a portion of them more than we normally would be able to. So Section 179 has been around for quite a while, but bonus depreciation is new since 2018. Bonus depreciation kind of expands on what Section 179 does and does it a little bit better. It's also a temporary provision. From 2018 to 2022, bonus depreciation was available for 100%. Buy a $10,000 paint sprayer, write off the full $10,000. In 2023, we're starting to see bonus depreciation phase down to 80%. 2025, 40%. 2026, 20%. And it's designed to phase out completely in 2027.