Mike Andes explains why deferring Section 179 expensing on a $30,000 asset can save more in taxes. If you expect to earn more in future years, spreading the deduction over five years lets you claim it at a higher tax bracket (24-28%) instead of now at 10%.
One of the things Brad explained to me that really kind of changed my mindset is if you expect to make more money next year and the year after that, and in 5 years from now, maybe you actually don't want to take the Section 179, right? Because if the tax bracket that you will be in in 5 years is likely going to be higher, right? And so instead of taking your $30,000 Section 179 when you're in a 10% bracket, maybe you take a 5-year depreciation schedule so that in year 5 you have something to write off when you have— you're in a 24, 25, or 28% bracket.
