Practice Management

I guess I should start off by saying that I am not a tax expert, and do not intend to provide you individual tax advice.

This said, private practice attorneys must employ some simple tax strategies to remain as competitive as possible.  One of the best ways to do this, before the end of this year anyway, is to buy the equipment you want or need for your practice and employee it before the end of the year.

In short, the government wants to get you to buy things, on credit or otherwise, and to have it in use before the end of the year.  There are many things that even a Third Wave practice can use that you might be buying next year, but for which there is a better tax treatment now, such as a new car, computer or tech.

Add this to the fact that because of the present economy you can negotiate down car prices and receive low or no interest, and you have to consider biting the bullet now rather than later.

If your law practice has less than $810,000 in depreciate property (and who among us does not), Section 179 of the tax code now lets you deduct up to $250,000, which is up from $125,000 last year, on purchases of new equipment. As stated, although this first criteria might not matter to you unless you are Big Law, what is important is that you can take bonus depreciation equal to 50% of the equipment?s value, all before regular depreciation kicks in. The big requirement that could cost is that you must start using start using the new stuff before end of the year.  So, if you get yourself a new car, or laptop, or cell phone for Christmas, you need to use it for work between Christmas and New Years.

Additionally, if you are thinking about a new automobile, make it a hybrid and you get a tax credit.  (The only problem is that the Fed has limited the number or amount of credits for car companies, and so all of the tax credits available for buying a Toyota Prius are all used up).