Start up costs

[Bees Knees]

However, remember using 179 in 2010 will reduce income taxes but not S/E. Maybe better to depreciate to reduce future S/E tax.

This brings up an interesting planning idea. SE tax is reduced by 2% in 2011. Thus, any major purchase in 2011 will produce less of a tax savings than something in 2012.

For example, a $100,000 purchase of heavy construction equipment will save $13,300 in SE tax in 2011 if Section 179 is taken. That same purchase in 2012 will save $15,300 in SE tax.

Is it worth depreciating major 2011 purchases and spreading out the deduction over serveral years verses taking 179 in order to save more in SE tax?