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What this is
Large purchases (skid steers, trailers, trucks, equipment) can be depreciated over time or written off faster using special rules.
Options
- Section 179 expensing
- Bonus depreciation
- Standard depreciation schedules
Why it saves taxes
Depreciation:
- Reduces taxable profit
- Matches expense with asset usage
- Can eliminate “paper profits”
Common missed opportunities
- Equipment purchased but never depreciated
- Loans ignored when categorizing interest vs. principal
