This is a rich topic, and it may extend into more than two weeks’ worth of notes.
1. Use One Fixed Expense To Replace a Monthly Cost
Here’s a good example: Do you have one of those filtered water deals, where the rep comes by every so often and gives you more 5 gallon jugs? Instead of buying all that water (to the tune of several thousand dollars over the course of a year), install a filter and fill those jugs for free with water you already pay for. For a few hundred dollars, you can install a high-pressure filter to your office kitchen sink. And you no longer need to coordinate drop-off times with the water people.
You don’t have to stop with water, but that’s one way to get your mind moving on areas such as this.
2. Deduct for Tangible Assets (Section 179)
This nice little provision in the federal tax code allows business owners to deduct for certain tangible assets, such as property and equipment. The GREAT news is that a bill passed in December 2015 set the deduction limit for most new and used capital equipment, and even certain software, at $500,000 after inflation (this would be only $25,000 prior to the current law). Also, this was retroactively applied for 2015 purchases as well (did your existing accountant take this into consideration, I wonder?).
There is also a 50% Bonus Depreciation in place, for qualified new equipment purchased this year, which can also be taken by some businesses after the Section 179 deduction.
This is something you should let us know if you’d like to pursue, ASAP, as we can help you with it, directly.
3. Creative Employee Compensation
Short on cash to cover bonuses, or even payroll? Offer a few extra paid vacation days for the coming year instead. That way, you can still compensate employees for hours they didn’t work–but you don’t have to lay out all that cash in one shot. (Note: This may be a tough sell, but it’s worth a try.)
