Mark Kocher explains why taking a $1,000 tax deduction now beats waiting until next year. If your tax bracket stays the same, you get an interest-free loan from the IRS by deducting today. The only exception: defer if you expect to be in a higher bracket later.
The time value of money. Would you like $1,000 deduction with the IRS today you're going to spend $1,000. You want the deduction with the IRS today or a year from today? You get to choose. Now setting aside Matt's point for a moment that you've got to look at your bracket situation because if you're in a higher bracket a year from now and you are pretty confident kicking that deduction to next year is going to have more bang for its buck. Okay but if not holding things constant with the same tax bracket today and a year from now I think all of you should answer the correct ANSW today. That thousand dollars is worth more to you today because the IRS is giving you kind of an interest free loan on that money even if you have to give it back when you sell the equipment with recapture. The point is a deduction today is always better than a deduction tomorrow if you're going to spend the money anyway and if you're in the same bracket.
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