The same sentence has come out of my mouth in a few rooms this summer, from a roundtable of finance leaders to a couple of owner meetings, and I'm going to say it here too, because Q4 is when it matters most. Spending money just to avoid taxes doesn't make sense.

I know how that lands in October, when every business owner I know starts getting the itch. The year is winding down, the profit looks bigger than expected, somebody at a dinner mentioned a truck, and suddenly a purchase that wasn't on the list at Labor Day feels like a bargain simply because it comes with a write-off attached.

A Write-Off Is Worth Your Rate, Not Your Dollar

That $7,600 is the part that gets lost in the excitement, because the tax savings show up as a cheerful number on a spreadsheet while the money leaving your account is very real and very gone. Run the same $10,000 through the 22% bracket and you save $2,200 and spend $7,800, and your state may add a little on top of either one, so the savings are real but they're always a fraction of the check you wrote.

The question I'd rather you ask is the plain one. Would I buy this at full price? If the answer is yes, the write-off is a nice discount on something you already needed, and if the answer is no, the write-off is a way to spend $7,600 on something you didn't want.

When the Purchase Was Already on the List

Now, plenty of purchases do belong on the list. The van that's been limping since spring, the equipment you've been pricing for a year, the computers your team has been politely complaining about, and for those the tax side is worth a real look because the timing decision has real money in it.

The detail that trips people up is that phrase about being put into service. Buying the equipment on December 29 and letting it sit in a box until January doesn't count for this year's return, while getting it running by December 31 does, so the tax year you pick for that purchase is a real decision, and it deserves a conversation with your tax preparer before the calendar makes the decision for you.

The tax year matters because a deduction is worth the most in the year your rate is highest. If this year looks strong and next year looks lighter, taking the deduction now makes sense, and if the pattern runs the other way, you may be better off letting the purchase slide into January and taking the deduction when it saves you more.

The Bonus Your Business Can Afford

The same thinking applies to year-end bonuses, which I hear about most in November and December. A business owner wants to say thank you to a team that carried a hard year, and I love that instinct, so I'm going to say the next part gently. It would be irresponsible to borrow on a line of credit just to pay bonuses.

A bonus is a thank-you that comes out of real excess, meaning what's left after the taxes, the debt payments, and the obligations are all covered. When it comes from borrowed money, it's a management problem wearing a reward's clothing, and it also resets expectations, because next December your team will remember this December.

If the bonus is the right call, there are good ways to build toward it, like setting aside a little each month so the money exists before December shows up, and your people get the thank-you without your business getting the loan.

Here's what I'd do before the end of the year. Pull out the list of purchases you were already planning for the next twelve months, subtract the tax savings from the price to see what each one really costs, and ask whether you could pay for it from cash on hand without touching the line of credit. Whatever passes that test, ask your tax preparer about the placed-in-service date and let the write-off do what it's good at, which is lowering the price of something you wanted anyway!

Frequently Asked Questions

Is it smart to buy equipment just for the tax write-off?

Usually not. A deduction only returns your tax rate on the amount you spend, so a $10,000 purchase in the 24% bracket still costs you $7,600 after the savings. If you'd buy the equipment at full price anyway, the write-off is a welcome discount, and if you wouldn't, it's an expensive way to save money.

How much does a $10,000 business expense actually save in taxes?

It saves $10,000 multiplied by your marginal federal rate, plus whatever your state adds. In the 22% bracket that's $2,200, and in the 24% bracket it's $2,400. Your tax preparer can tell you which bracket applies to you.

What is bonus depreciation and is it still available in 2026?

Bonus depreciation lets a business deduct the cost of qualifying equipment in the year it's put into service instead of spreading the deduction over several years. The One Big Beautiful Bill Act made 100% bonus depreciation permanent for qualifying property acquired after January 19, 2025, so it's available for 2026.

Does equipment have to be in use by December 31 to count for this year?

For depreciation deductions, generally yes. The equipment has to be placed in service, meaning ready and available for use in your business, by the end of the tax year. Buying it on December 29 and leaving it in the box until January usually pushes the deduction to next year's return.

Should I borrow to pay employee bonuses?

I wouldn't. A bonus works best when it comes from real excess after taxes, debt payments, and obligations. A bonus paid with a line of credit is still deductible, but the debt and interest remain after the money is spent, and your team will expect the same next year.

If you'd like help sorting out which year-end purchases and bonuses belong in your plan, that's a conversation we'd be glad to have. Bring your list, and we'll run the real numbers together.