BETTER BUSINESS & SALES
BY PHIL SASSO
CONTRIBUTING EDITOR
Phil Sasso is president of Sasso
Marketing Inc. (sassomarketing.
com), a technical marketing
agency specializing in tools
and equipment. Subscribe
to his free marketing tips at
philsasso.com/blog
As a tool dealer, it’s not about how much you
earn, it’s about how much you keep. I wish
I could take credit for that thought, but it’s
been around forever. And, in light of recent federal
income tax changes, it’s never been more relevant
than today.
Remember: No one has an obligation to pay
more in taxes than he or she legally owes.
“Anyone may arrange his affairs so that his
taxes shall be as low as possible,” Judge Learned
Hand (1872-1961) famously said. “He is not bound
to choose that pattern which best pays the treasury.
There is not even a patriotic duty to increase one’s
taxes.” Hand was one of the longest serving and
most quoted U.S. Federal Judges.
To get a deeper insight on tax strategiesI talked
to a long-time friend and client, Gregory Fydryck, a
CPA and tax advisor based in Schiller Park, Illinois.
Here’s the obligatory disclaimer: I am not a tax
expert. This article is for informational purposes
only. It should not be relied on for tax, legal or
accounting advice. Consult your own tax advisor
about any tax or financial strategies.
Now with that out of the way, let’s talk taxes.
Check out your paycheck
If you run your business as a corporation
(S Corp., C Corp.) and draw a paycheck, you may
notice you’re paying less in taxes this year. Now,
before you get all warm and fuzzy, you need to be
aware you can’t have it both ways.
“That means the tax-time refund you get next
year may not be what you expect,” Fydryck says.
Instead of getting it all back in your refund,
you may have gotten it all back in your paycheck.
So, be prepared.
Year-end buying spree
If you have a few extra dollars in the bank in
fourth-quarter, you may be tempted to stock up on
inventory at the end of the year. But there is no tax
advantage to doing that. You can’t write off inventory
that’s sitting on your shelf collecting dust.
But you can write off assets you purchase and
48 Professional Distributor I October 2018 I VehicleServicePros.com
put into service before the end of the year.
“So if you need furniture or fixtures, consider
buying them before end of year,” Fydryck says.
You can ‘Section 179’ it, which means you can
deduct the full purchase price of the products the
year you buy them and put them into service.
If you buy shelves, displays, signs, lighting,
computers or even software to use on your truck,
you can immediately write it off against your current
year’s income and potentially lower your tax
liability. You can elect to deduct up to $1 million
in property that you put into service in 2018. (For
details, see irs.gov/publications/p946.
Keep on trucking – and depreciating
You can’t write-off your entire vehicle under Section
179 unless it cost $5,100 or less, says Fydryck.
You can, however, Section 179 the first $5,000 and
depreciate the rest of the cost of the vehicle over
5 years. You’d use a “double declining balance” to
write off your truck over half a decade.
The math may sound a bit confusing, but your
accountant or tax preparer will understand how to
do it and will likely have a handy dandy calculator
to make number-crunching easier.
Give it the gas
You probably already know this, but you can’t
deduct your truck’s miles. You need to deduct
actual expenses. So keep accurate records of every
gas purchase, repair, insurance payment, license fee
and all the other expenses of running your truck.
“Keep two credit cards in your pocket,” Fydryck
says. “One that you use for personal items and one
that you use exclusively for business.” It will make
tax time much, much easier.
See this worksheet online (philsasso.com/taxtips)
for an idea of what you may want to consider
including on your expense list.
You’ll get a higher
standard deduction...
As I said earlier, you’ll get a much higher standard
deduction this year.
Go online
for more
Want more sales tips? Go
online for more exclusive
content specifically
tailored to you.
Visit vehicleservicepros.
com/distributors.
The taxman cometh:
Are you ready for tax season?
How to keep more of what you make, and make more of what you keep.
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