Adam SandCEO of Roofing Business Partner

Buying Equipment Won’t Always Save You on Taxes

20 May 2025 · 1 min

Watch on YouTube

0:52

Adam Sand explains why buying equipment doesn't always cut your taxes. Equipment purchases usually get capitalized and depreciated over five to seven years instead of fully deducted upfront. One buyer spent $500,000 on equipment but still owed taxes because they couldn't write off the whole amount in one year.

Questions this video answers

May 20, 2025

Almost a half a million dollars (about $500,000).

Around five to seven years.

Chapters

If you're starting out first year in business and you're spending a lot of money on equipment, it depends. An LLC or making the S election may not make sense, but if you had an llc, you could take a loss potentially. Equipment. If you're buying stuff, right, you have to be aware that purchasing equipment, you may not be able to fully expense all of that equipment right now. You may have to capitalize that. I had a guy who, he bought some equipment to the tune of almost a half a million dollars, but he wasn't able to fully expense all that $500,000. And so he actually ended up having a small profit. He's like, how am I paying taxes when I had all this equipment that I could write off? And I was like, well, we weren't able to take all of that equipment right off right now because that equipment's going to last you five, seven years, you know, whatever that depreciable life of that asset was.