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Should You Make That Big Business Purchase Before the Year Ends?

  • Writer: Noelle Heddle
    Noelle Heddle
  • Dec 15, 2025
  • 3 min read

As the end of the year approaches, many business owners find themselves weighing a familiar question:“Should I go ahead and make that big business purchase before the year ends?”


Maybe you’re eyeing new equipment, upgraded software, or a company vehicle. While a year-end purchase can sometimes lower your tax bill, it’s not always the best financial move. The key is to balance timing, cash flow, and long-term strategy before you spend.

Here’s how to make a confident, informed decision before the clock strikes midnight on December 31.


1. Start With Your Why

Ask yourself why you’re considering the purchase right now.

  • Is it something your business truly needs to operate more efficiently?

  • Will it help you generate new revenue or save time next year?

  • Or are you mainly trying to reduce your taxable income?


Pro tip: A purchase made solely for a tax deduction often leads to buyer’s remorse. Focus on long-term value, not short-term savings.


2. Understand the Tax Advantages

Business owners can often deduct the cost of equipment, vehicles, or software purchased and put into service by December 31 through Section 179 of the IRS tax code.

  • What qualifies: Equipment, machinery, computers, off-the-shelf software, and certain business vehicles.

  • How it works: You can deduct the full purchase price (up to IRS limits) in the year you buy and use the item, instead of depreciating it over several years.

  • Resource: Check the latest IRS Section 179 details at irs.gov/section179.


Bonus: There’s also bonus depreciation, which allows additional write-offs on qualifying property. Your accountant can help you determine which method offers the greatest benefit for your situation.


3. Review Your Cash Flow First

A tax deduction doesn’t help if the purchase strains your budget. Before you commit:

  • Review your year-to-date financial statements.

  • Ensure you can pay for the purchase without borrowing excessively or dipping into emergency reserves.

  • Consider your upcoming expenses in Q1 (taxes, payroll, vendor payments).

If your cash flow feels tight, you might be better off waiting until the new year or exploring financing options that align with your 2026 budget.


4. Think Strategically About Timing

Sometimes delaying a purchase can make more sense. For example:

  • If you expect higher profits next year, you may benefit more from taking the deduction then.

  • If your income is unusually high this year, a year-end purchase could help balance your taxable income.


Tip: Review your current and projected income with your accountant to decide which year the deduction will have the biggest impact.


5. Explore Smart Purchase Options

If you decide to move forward, consider the best way to buy:

  • Buy used: Quality pre-owned equipment can offer major savings and may still qualify for deductions.

  • Negotiate year-end discounts: Many suppliers offer special pricing in December to clear inventory.

  • Leasing options: Leasing may provide flexibility if you want to preserve cash or test new equipment before committing long-term.


6. Document Everything

For tax purposes, make sure you have:

  • Receipts or invoices showing the date of purchase.

  • Proof the item was placed in service before year-end (for example, installation records or a usage log).

  • Updated depreciation schedules and asset lists for your records.

Proper documentation protects your deduction if you’re ever audited.


7. Partner With a Professional

The smartest financial decisions are rarely made in isolation. A trusted financial advisor or accountant can help you:

  • Calculate your potential tax savings.

  • Evaluate the impact on cash flow.

  • Create a purchase plan that aligns with your business goals.

If you’re unsure where to start, Alliance Financial Solutions can help you analyze your year-end financial picture and determine whether that big purchase makes sense now—or later.


8. Helpful Tools & Resources


Final Thoughts

A big purchase can be a smart move, if it’s strategic. Before making any last-minute spending decisions, take the time to assess your business needs, cash flow, and tax situation. The right purchase at the right time can position your business for stronger growth and stability in the year ahead.


Need help making the decision?The team at Alliance Financial Solutions can walk you through your options and help you finish the year strong–with clarity, confidence, and a solid plan for what’s next.


Visit alliancefinancialinc.com to schedule your year-end financial review.

 
 
 

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